Sainsbury’s has announced it will sell its Argos Financial Services (AFS) cards portfolio to NewDay Group.
The AFS cards are held by around two million Argos customers who use the credit to manage the cost of their purchases, making up around 20 per cent of all Argos sales.
The supermarket said the purchase price for the portfolio buyout is expected to be around £720 million, which is in line with the expected net value of loan balances and associated provisions at the end of Q1 2025, when the deal is expected to be completed.
Sainsbury’s has also partnered with NewDay to create an Argos-branded credit proposition which will replace the existing one.
Sainsbury’s claims the new offering will provide customers with a wider choice of flexible and more convenient ways for customers to manage the cost of their purchases.
The retailer has recently been offloading its financial services products to focus on its core business.
In June, Sainsbury’s announced it would sell Sainsbury’s Bank to NatWest Group. This included personal loan, credit cards and retail deposit portfolios.
In September, the company said it would sell Sainsbury’s Bank ATM business to Note Machine.
Sainsbury’s said it would benefit from the financial services income streams which have a “stronger connection” to its retail offering. It expects the combination of commission income from insurance, travel money and ATMs alongside income from the NewDay partnership to deliver an annual income of around £40 million in the financial year to March 2028.
“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,” said Simon Roberts, Sainsbury’s chief executive. “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.”
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