Macy's Will Stick With Citigroup For Its Credit Card Through 2030
(Bloomberg) -- Citigroup Inc. and Macy’s Inc. renewed their longtime credit-card partnership after the two spent months renegotiating the terms of the agreement.
As part of the deal, Citigroup will continue to provide payment offerings for the retailer’s Macy’s and Bloomingdale’s brands through March 2030, the companies said Monday in a statement.
“We’re so pleased to announce a multiyear extension of our 16+-year credit-card program with Macy’s,” David Chubak, head of Citi’s retail-services business, said in the statement. “Together, we’re very excited to continue providing innovative payment offerings for Macy’s and Bloomingdale’s shoppers.”
The move comes after Citigroup informed Macy’s of its plans to terminate their current credit-card deal after the department-store chain’s sales were hammered during the pandemic. Under the terms of their previous deal, Citigroup had an option to terminate the tie-up if Macy’s sales fell by more than 34% over a 12-month period compared to the year ended June 2007, a threshold that was triggered earlier this year.
Citigroup’s warning meant Macy’s began evaluating its options to sell the credit-card portfolio to another financial-services entity, though it continued negotiations with Citigroup on a new pact.
Last month, Macy’s said net credit-card revenue in the third quarter rose to $213 million, a 16% jump compared to the same period in 2019. While new accounts dropped overall during that time, the retailer saw a 38% surge in digital new accounts, which it said was driven by “stronger approval rates, consistent with healthier online credit customer and stronger application flow.”
Historically, Macy’s credit-card revenue amounts to about 3% of sales. Going forward, the retailer anticipates that percentage will be “slightly lower,” the company told investors last month.
“We are pleased to extend this important partnership with Citi,” Adrian Mitchell, Macy’s chief financial officer, said in a statement. “Citi has been a strong partner to Macy’s Inc. for many years, and we look forward to continuing our work together based on the shared commitment to innovation and customer-service excellence.”
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