The Neiman Marcus Group Inc. (Dallas) has sold its private label credit card accounts and related assets to HSBC-North America (Prospect Heights, Ill.) as part of a strategic alliance.
The Retail Services division of HSBC – North America will purchase the private label credit card accounts and related assets of Neiman’s and its New York-based Bergdorf Goodman subsidiary, as well as the outstanding balances associated with such accounts, for approximately $640 million. In addition, Neiman Marcus will receive on-going payments related to credit sales generated under the agreement. Neiman Marcus will continue to handle key customer service functions, including new account processing, transaction authorization, billing adjustments, collection services and customer inquiries. And HSBC agreed to assume or repay about $113 million in liabilities.
The Neiman Marcus and Bergdorf Goodman portfolio is said to comprise a total of approximately 3 million accounts.
“We are very excited about our new partnership with HSBC,” said Neiman Marcus president and ceo Burt Tansky. “Our customers can expect the same outstanding customer service they have always received from Neiman Marcus and Bergdorf Goodman, while HSBC will provide us with additional operational and marketing capabilities to support our continued growth.”
This transaction is expected to close by July 31, 2005, subject to customary regulatory review and closing conditions.
The HSBC-North America subsidiary includes all U.S. and Canadian businesses of HSBC plc (London), the largest banking company in the UK. It said, in connection with the transaction, that it would not be selling the names of Neiman’s affluent charge customers. “It will not happen; we’ve always been very protective of our customers,” a Neiman spokeswoman said. As far as Neiman shoppers are concerned, she said, “the transition will be a seamless one.”
Neiman’s said it will handle the initial efforts in bill collections. HSBC will take over the negotiations when they become more difficult.
Neiman’s was one of only four major retail chains in the United States that still operated its own credit card business. Last week, Federated Department Stores Inc. (Cincinnati) announced it would sell its credit card business to Citigroup (New York). Citigroup was also one of the bidders for the Neiman Marcus business, along with American Express Co. (New York).
HSBC also manages the credit card operation for Saks Fifth Ave. (New York), Neiman Marcus’ primary luxury retail chain rival, as well as for the Marks & Spencer Group plc (London).