David Jones bids for credit card backer

By Craig Zammit

SYDNEY: David Jones will soon decide on the format of its preposed general purpose consumer credit card, with the option to go it alone or join forces with one of 11 banks and financial groups, who will submit offers for the credit card this week.

The credit will take advantage of David Jones’ existing customer base and will be available for use on all purchases, inside or outside of David Jones stores. The resulting monetary offers will reveal how valuable the retailer’s customers are to the involved financial services companies.

“We’re looking at taking our existing customer base and getting a large percentage of their spend outside our store,” David Jones chief executive Mark McInnes told the Financial Review.

“We are currently earning one-third of the company’s earnings from the existing company credit card – shopped only within our stores.”

With the decision yet to be made, the two key factors for David Jones will be the upfront fee the financial groups will be willing to pay to gain access to the David Jones customer base and the expected cost of ongoing revenues and commissions.

“We’re trying to determine whether one of the financial institutions can provide us with the financial structure and benefits equal to or better than going it alone. If the capability of an existing financial institution is better than our capability in a shareholder return sense, then we’ll partner with someone,” he said.

The decision as to whether David Jones will team up or not will be made by the end of April.

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