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Cards connection a thorn in the sale of Myer

17 August 2005 10:00AM
The Coles Myer public relations into the possibility that the Myer department store chain "might" be for sale might also be some convenient public relations to minimise scrutiny of the core Coles supermarket business, as the Financial Review points out today.Assuming that Myer is for sale, it's interesting to speculate on the implication for GE Capital, which is half way into a 20-year contract with Coles Myer to supply store finance, store cards and now credit cards to all the group's retail brands.Presumably none of the private equity groups or foreign retailers linked to Coles Myer would find it easy to untangle the contract that Coles entered into with GE Capital, but it's interesting to wonder about what options they would have to do so.GE apparently has carry forward rights to supply store finance and store cards in the even of any break up of the Coles Myer chain.The Myer department stores are said to still account for a majority of the unknown level of spending on the Coles Myer Source MasterCard, the successor to the "red card" and the family of store cards (including the Myer card) that preceded the launch of the co-branded credit card two years ago.

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