Canadian Tire is known as one of the strongest Canadian retailers in the country, specializing in automotive and household products. But the company also operates its own line of rewards credit cards, providing cardholders points for discounts on in-store and online products.
The company revealed its second quarter earnings at a meeting of current and interested shareholders this week. The financial services segment of the company generated over $250 million in revenue, while the amount of money owed on Canadian Tire credit cards was worth over $4.3 billion. Both figures are improvements from the same period in 2012.
Despite the upward trend, Canadian Tire announced that it will find a financial partner to manage the credit card business to reduce the risk of funding that segment of the company. Stephen Wetmore, President and CEO of Canadian Tire, says the company worked very hard over the last few years to combine the financial services business with the traditional retail operations.
“As a result of that work, we are now well-positioned to explore an arrangement that would allow us to increase our financial flexibility, while continuing to enjoy the substantial contributions of our financial services business.”
One of the goals of working with a new partner is to reduce the credit card write-off rate. The write-off rate did fall to 5.86 percent in the second quarter of 2013 from 7.16 percent over the same time in 2012, but Wetmore and his team want to lower that rate even further.