Supermarket group Sainsbury PLC has announced the sale of the Argos Financial Services (AFS) cards portfolio to NewDay Group.
The AFS cards support around 20 percent of Argos sales and are held by around two million Argos customers who use Argos credit to manage the cost of their purchases.
The purchase price for the portfolio acquisition is expected to be around £720m, broadly in line with the expected net value of loan balances and associated provisions at the end of Q1 2025 (when completion of the beneficial title transfer is expected to occur).
Sainsbury’s has also announced the creation of a partnership with NewDay to create a new Argos-branded digital credit proposition. This will, in time, replace the current Argos card credit propositions with a wider choice of modern, flexible and more convenient ways for customers to manage the cost of purchases.
This announcement follows the 20 June 2024 announcement of the sale of Sainsbury’s Bank’s personal loan, credit card and retail deposit portfolios to NatWest Group and the 25 September 2024 announcement of the sale of Sainsbury’s Bank’s ATM business to NoteMachine. The group expects both these transactions to complete in the first half of calendar year 2025.
AFS customers and Argos Card customers do not need to take any action as a result of this announcement. There will be no immediate changes to customers’ existing terms and conditions.
Simon Roberts, Sainsbury’s CEO said: “As we make progress with the plan for Next Level Sainsbury’s, this is a key milestone in building our future model for Financial Services. It’s really important we work with partners who share our values and customer focus. NewDay is a complementary fit for us as we strive to give customers at Argos the best value and choice and make it as easy as possible for them to buy the products they need.”
John Hourican, NewDay’s CEO said: “We look forward to welcoming AFS’ two million customers to NewDay, where they will benefit from our increased digital offering and award-winning customer service, and we are fully focused on ensuring a smooth transition for these customers. This is a great opportunity to forge a partnership with one of the UK’s leading retailers as well as accelerate the growth of our Credit business, in line with our strategic objectives.”
