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  • Gap, Synchrony Ending Card Partnership After Talks Faltered
    Bloomberg

    Gap, Synchrony Ending Card Partnership After Talks Faltered

    (Bloomberg) -- Gap Inc. and Synchrony Financial are parting ways after they couldn’t reach an agreement to renew their longstanding card partnership.The clothing retailer has decided to shift the portfolio to Barclays Plc beginning in May 2022, it said in a statement Tuesday. Synchrony said in a regulatory filing that it expects to recognize a gain on the sale of the portfolio when it unloads it next April.“Synchrony was unable to reach contractual and economic terms with Gap that made sense for our company and our shareholders,” the Stamford, Connecticut-based firm said in the filing.Synchrony shares dropped 3.9% to $41.46 at 9:42 a.m. in New York, the worst performance in the 65-company S&P 500 Financials Index. The lender plans to use about $1 billion of the proceeds from the sale of the portfolio to buy back shares and invest in “higher growth programs,” according to the filing.Gap and Synchrony have offered cards together for more than two decades, and the lender counts the retailer as one of its five largest partners. The portfolio represents about 5% of the bank’s roughly $80 billion in receivables.It’s the second time Synchrony has opted not to renew a partnership with a major retailer after Walmart Inc. shifted its portfolio to Capital One Financial Corp., a move that was first announced in 2018. The decision comes just a few weeks after the lender installed Brian Doubles as its new chief executive officer, replacing its longtime leader, Margaret Keane.“This is a speed bump,” Jon Arfstrom, an analyst at RBC Capital Markets, said in a note to clients. “We do not believe this loss (and Walmart in 2018) are due to any uncompetitive positioning for Synchrony, and we believe it comes down to preferences and negotiations and bottom-line profitability.”Gap, like most of its mall-based peers, has struggled to attract customers during the coronavirus pandemic. “We faced one of the most difficult years in our company’s history,” Chief Executive Officer Sonia Syngal said last month as Gap capped its fiscal year with fourth-quarter sales that fell short of Wall Street’s expectations.What Bloomberg Intelligence Says:“Revenue and earnings from the Gap partnership have been steadily shrinking, so the retailer’s move to Barclays should reduce Synchrony’s costs and shift resources to new, high-potential cards with Venmo and Verizon.”-- David Ritter, BI fintech analystClick here to read the research.Its Banana Republic brand, which primarily sells work clothes, has been particularly weak. One bright spot for the retailer is its Athleta activewear brand, which passed $1 billion in sales in 2020.Gap said the new credit-card program will be a key component of the revamped rewards program it launched in September. Barclays will issue both private label and co-brand credit cards for Gap, with the latter using Mastercard Inc.’s payment network.Barclays, for its part, has been looking to diversify its card partnerships, which have long focused on airlines, cruises and hotel chains. The firm recently debuted a new card with the nonprofit AARP.“Gap Inc., Barclays and Mastercard share a common goal of delivering great value to customers and an exceptional cardmember experience,” Gap said in its statement. “This new partnership brings together long-term leaders and innovators in retail, banking and payments.”(Updates with Gap statement beginning in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • HanesBrands Celebrates Earth Day with 12th Consecutive U.S. EPA Energy Star Award for Environmental Stewardship
    Business Wire

    HanesBrands Celebrates Earth Day with 12th Consecutive U.S. EPA Energy Star Award for Environmental Stewardship

    HanesBrands celebrates Earth Day with 12th consecutive U.S. EPA Energy Star Award for environmental stewardship.

  • Pentair Earns 2021 ENERGY STAR® Partner of the Year – Sustained Excellence Award
    Business Wire

    Pentair Earns 2021 ENERGY STAR® Partner of the Year – Sustained Excellence Award

    Pentair is proud to announce it received the 2021 ENERGY STAR® Partner of the Year – Sustained Excellence Award for the eighth consecutive year.