Household HSBC Watch

Stephen D. Simpson, CFA, on March 4, 2005 wrote “Saks’ Fate Hangs on Margins” for Motley Fool. We sent him this email:

Of interest to those behind the scenes is the fact that, in an attempt to be profitable, Saks leadership decided to use predatory lender Household International as their private label credit card provider. Now called HSBC Finance Corporation, the move aligned customers who really didn’t have a need for a Saks card with a predatory lender that earned its bad reputation servicing customers that probably never shopped at Saks.

Saks Incorporated Chairman and Chief Executive Officer, R. Brad Martin, commented, “We are pleased to enter into this important strategic alliance with Household. This is a unique opportunity to join forces with one of the most highly regarded, well-established consumer finance companies in the world, while leveraging our core competency of customer service.”
(Quoted from: http://www.saksincorporated.com/investor_relations.html)

Is this an attempt to distance himself from the obvious? Most highly regarded where? Did R. Brad turn pale on October 14, 2002, when the “highly regarded” became the 484 million dollar predator?

We operate Household - HSBC Watch - a consumer watchdog website that monitors HSBC, which got its start monitoring predatory lending by Household International. We concur with the findings in your recent article for Motley Fool. Given Martin’s quote shown above it is easy to see how he has the business sense to move Saks market cap backwards.