J.P. Morgan Chase & Co. will end its credit-card issuing deal with Sears Canada Inc. next November, marking another setback for the struggling Canadian retailer.
The programme, during which J.P Morgan services the Sears Card and Sears MasterCard credit cards, is set to expire on November 15 2015, the two companies said on Monday.
Toronto-based Shears and J.P. Morgan hope to work together in the meantime to explore a sale of the credit-card programme.
If a sale is reached, J.P. Morgan has agreed to pay up to 174 million Canadian dollars ($154 million) to the retailer under certain circumstances, the Wall Street Journal reported.
The decision is another blow to Sears, just a month after the Canadian retailer’s parent, Sears holding Corp, unveiled a plan to sell off most of its 51 per cent stake to shareholders as a rights offering. The company’s chief executive also resigned earlier this year.
Sears has been facing competition from the entry of a number of US retailers into Canada over recent years.
“Our customers will be able to continue to use their Sears Canada cards through to November 2015 and we expect no interruption, with the same service levels provided previously by J.P. Morgan Chase,” Ron Boire, Sears Canada’s acting chief executive, said in a statement Monday. “In the interim, we will explore options that will enable us to continue to provide the high level of service to which Sears Canada customers are accustomed.”
Sears Canada sold its credit and financial services business to J.P. Morgan in 2005 for about C$2.2 billion.
Sears Canada will report its fiscal third-quarter results Tuesday.
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