Sainsbury’s makes a strategic move by selling its Argos credit card portfolio to NewDay Group for £720 million.
- The deal aligns with the expected net value of loan balances, set to finalize in the first quarter of next year.
- Sainsbury’s credit cards are used by two million customers, contributing significantly to Argos sales.
- A new partnership with NewDay aims to introduce modern, flexible digital credit solutions for Argos customers.
- Sainsbury’s previously announced plans to exit most of its banking operations, with a sell-off to Natwest.
Sainsbury’s has embarked on a significant strategic shift by deciding to sell its Argos credit card portfolio to NewDay Group for £720 million. This transaction is expected to match the net value of loan balances by the end of the first quarter next year, marking a key phase in the company’s ongoing restructuring of its financial services.
Currently, the Argos credit card portfolio underpins 20% of Argos sales, providing around two million customers the financial flexibility to manage their purchases. This sale aligns with Sainsbury’s broader plan to streamline and focus its business operations.
In an effort to enhance customer experience, Sainsbury’s will partner with NewDay to develop a new Argos-branded digital credit offering. This initiative aims to deliver a ‘wider choice of modern, flexible and more convenient ways for customers to manage the cost of purchases,’ according to the supermarket chain.
Sainsbury’s CEO, Simon Roberts, emphasized the importance of this partnership, noting that NewDay is ‘a complementary fit’ as both firms strive to offer customers the best value and choices in a rapidly evolving retail landscape. The collaboration is key to Sainsbury’s vision of simplifying transactions for Argos shoppers while maintaining a strong focus on customer service.
Earlier in the year, Sainsbury’s declared its intention to exit the majority of its banking operations, selling to Natwest Group. This decision, already in motion, is expected to wrap up in the initial half of the next year.
This transaction represents a pivotal step in Sainsbury’s strategic realignment of its financial services.
