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(Bloomberg) – Walmart Inc.'s lawsuit against Synchrony Financial raises doubts about the lender's efforts to renew its partnership with Sam's Club, the retailer's warehouse subsidiary.
"This puts an end to the debate about whether Synchrony can keep the Sam's Club relationship," said Kevin St. Pierre, an analyst at Sanford C. Bernstein & Co., in a note to customers.
Walmart filed a lawsuit against Synchrony Financial on Thursday after negotiations failed on the opportunity to transfer a $ 10 billion portfolio to its new partner, Capital One Financial Corp. enforce parts of the partnership agreement.
The Sam's Club portfolio has about $ 8 billion in debt and is expected to be bidded soon. Synchrony has been issuing warehouse chain cards for 24 years.
Synchrony stated that its five largest programs – Gap Inc., J.C. Penney Co., Lowe's Co., Sam's Club and Walmart – accounted for most of the interest and fee income from its borrowings last year.
The Synchrony stock fell 5.6% to 27.80 USD at 8:12 am early in New York. The stock fell 24% this year until Thursday, compared with the 5.6% decline in the S & P 500 Financials index, which has 67 companies.
To contact the reporter about this story: Jenny Surane in New York at [email protected]
To contact the makers of this story: Michael J. Moore at [email protected], Steve Dickson, Daniel Taub
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