Cabela's Plans to Sell Credit Card Sector before Selling Business
Cabela’s is trying to sell its profitable credit card sector before selling off the company altogether.
Rumors of Cabela’s company-wide sale sparked last year when competitor Bass Pro Shops was working on a deal to buy the business. Those plans are on hold for now, since Bass Pro Shops wants nothing to do with Cabela’s credit card portfolio.
Credit card sales comprise about 30% of the hunting and fishing retailer’s transactions, to the tune of $1.08 billion. This could mean big profits for the future buyer. Some industry experts believe the eventual plan of selling the business may not come to fruition, or it will be put on an extended delay after the credit card sector is sold to a new owner.
The credit card business hasn’t always been profitable for Cabela’s. In April 2014, the company was ordered to pay a $1 million fine from the Federal Deposit Insurance Corp for deceptive credit card practices. In March 2011, the bank Cabela’s operates had to pay $10.4 million in fines for improper credit card fees. Nevertheless, the credit card sector remains a strong component of Cabela’s overall portfolio, and could yield significant revenues for an interested buyer.