Signet Closes Sale of Prime Credit Program

RAPAPORT… Signet
Jewelers has completed the first stage in outsourcing its in-house credit
program.




This includes
the sale of its prime-only receivables to
the card services business of Alliance Data Systems
Corporation for $960 million, Signet
said. Prime credit relates to customers with a strong likelihood of making
payments. The deal also involves contracting out the servicing of non-prime products sold on credit to Genesis Financial
Solutions.




Alliance Data will become the primary provider of credit, including
funding, underwriting and servicing, to Signet’s US stores under a seven-year
agreement. Genesis will provide credit-servicing functions for Signet’s
existing non-prime receivables, as well as future non-prime accounts, in a
five-year deal.




Furthermore, Signet has outsourced its lease-purchase payment program to Progressive Leasing, a subsidiary of
lease-to-own retailer Aaron’s. Lease-purchase is an incremental payment option
available for customers who do not qualify for Signet’s credit programs, or who
do not wish to pursue a credit option.




“The successful completion of the
first phase of strategic outsourcing of our credit portfolio has allowed us to
reduce our outstanding debt and return capital to our shareholders,” said Signet
CEO Virginia Drosos.




A priority of Signet’s credit deal has been to minimize impact on its
credit customers and substantially maintain its net sales, she added.