Capital One Financial Corporation (COF) announced a tie-up with Saks Fifth Avenue, an American luxury department store chain and the landmark store’s multinational parent company Hudson's Bay Company (HBC). The partnership is for a new credit card program, which is expected to incorporate the Lord and Taylor credit cards as well in June next year.
This affiliation will make Capital One a privileged issuer of Hudson's Bay credit cards as well as the latter’s other co-branded credit cards. Capital One will have access to all the retail outlets such as Hudson's Bay, Saks Fifth Avenue, OFF 5TH and Home Outfitters.
Under the new brand, the target will be to provide enhanced services to the customers including diverse payment choices. Moreover, the expected inclusion of the Lord and Taylor credit cards, which are operated by Synchrony Bank, will make the new partnership more attractive.
The association of both the companies goes back to 2011, when Capital One had acquired Hudson's Bay’s credit card portfolio. The new credit card program will further improve their business relationship and aid in delivering improved services.
Moreover, we believe that the latest deal will help Capital One revive its top-line growth, which has been showing a declining trend over the last several quarters. The deal will further strengthen the growing credit card business of the company.
Currently, Capital One sports a Zacks Rank #3 (Hold). Some better-ranked finance stocks include Ally Financial Inc. (ALLY) and Credit Acceptance Corp. (CACC). Both these stocks hold a Zacks Rank #1 (Strong Buy).
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