Capital One Financial Corp. of McLean has picked up the credit card portfolio of Kohl’s Department Stores, completing its first such deal in the United States.
For an unrevealed price the seven-year agreement, in the works since last August, transfers more than 20 million accounts from J.P. Morgan Chase to Capital One and calls for the local institution to issue cards to Kohl’s customers.
Neither the store nor its new partner would disclose the value of the credit card business. During Capital One’s earnings call in January, however, Chief Financial Officer Gary Perlin said it was “a $3 billion to $4 billion portfolio.” And according to a release from Kohl’s, the card business accounted for half of its revenue last year.
The private-label, or store-brand, credit card market is witnessing a resurgence, after a precipitous decline during the downturn when losses rose at a faster pace than general-purpose cards. Delinquencies and charge-offs have slowed in the past year, while stricter standards on traditional cards have made store cards more appealing to consumers.