Wells Fargo & Company (NYSE: WFC) and Dillard’s, Inc. (NYSE: DDS) (“Dillard’s”) announced today that the two companies have entered into an agreement for Wells Fargo to fund, issue and service Dillard’s-branded private label and co-brand credit cards. Wells Fargo will also manage the cardholder loyalty program for Dillard’s.
“Wells Fargo is pleased to partner with Dillard’s, a renowned retailer with one of the largest private label and co-brand credit card programs in the sector and a longstanding customer of our bank”
The program agreement has a 10-year term and is anticipated to become operational in the fourth quarter of 2014, following the scheduled expiration of Dillard’s current program agreement. Financial terms of the agreement were not disclosed. Dillard’s management believes its earnings from the new program exclusive of startup costs will be comparable to its historical earnings from the Dillard’s branded credit card products and believes that earnings will increase with future program growth.
“Wells Fargo is pleased to partner with Dillard’s, a renowned retailer with one of the largest private label and co-brand credit card programs in the sector and a longstanding customer of our bank,” said Tom Wolfe, head of Wells Fargo’s Consumer Credit Solutions. “We are honored to expand our relationship with a business that shares our commitment to providing significant benefits and experiences to customers, so they feel appreciated for the relationships they have with us. We look forward to bringing Wells Fargo’s proven marketing and underwriting capabilities as well as new rewards strategies to Dillard’s so together we can deliver great value to customers.”
“We are truly happy to announce this new agreement with Wells Fargo, one of the strongest and most reputable banks in the country,” said Dillard’s President Alex Dillard. “We are pleased with this new partnership on many levels, from the financial arrangements to our shared vision for future program growth. We talked with a number of potential bank partners and we believe Wells Fargo’s vision for the success of our credit card program is completely aligned with ours. We are looking forward to a very rewarding partnership with Wells Fargo.”
Through its Retail Services division in Consumer Credit Solutions, Wells Fargo offers consumer private label and credit cards to retailers throughout the United States. With more than 50 years of experience in the consumer finance industry, Wells Fargo credit programs are offered at 30,000 merchant locations nationwide.
Greenhill & Co. and First Annapolis Consulting, Inc. served as financial advisors and Simpson Thacher & Bartlett served as legal counsel to Dillard’s in connection with the agreement.