TD Bank Group announced on Wednesday that it would begin overseeing all aspects of the Fred Meyers Jewelry credit card program. Fred Meyers is one of the the largest jewelry chains in the U.S. and this could be a profitable venture for both entities.
TD, based in Toronto, has assets of $810 billion. In its announcement on Wednesday, it said its retail credit card services unit will begin overseeing the private label program. Fred Meyer Jewelers is based in Oregon and its subsidiary is Littman Jewelers. The agreement will allow TD Retail Card services to oversee and direct every aspect of the credit card issuance, billing, payables and receivables. TD Retail Card Services will oversee all 344 jewelry stores in 32 states. With many of its locations in malls and outlets, odds are, you’ve seen or visited one of its stores. The program will offer consumers varied options to finance purchases, the announcement included.
We are very excited to be able to offer customers even more savings and additional benefits with new and improved special financing, helping them celebrate life’s special occasions with the timeless gift of fine jewelry,
Peter Engel, Fred Meyers’ president, said in a news release.
This is just another step in a series of movies by TD bank to really begin moving its credit card business. Not only that, but Target announced it would also be partnering with TD Bank; and in fact, the move will likely mean it buys out Target’s credit card portfolio in its entirety. It’s expected the sale will for an amount equal to the gross value of the outstanding receivables, which are estimated today to be around $5.9 billion. You may recall that as recently as last December, TD Bank bought MBNA’s Canadian credit card portfolio which added another 8.6 billion to its bottom line. The purchase was made from MBNA’s parent company, Bank of America.
Fred Meyer Jewelers opened its doors in the early 1970s as more of a catalog showroom that was popular during that time. As that model began phasing out, in order to keep up its impressive growth rate, the company had to rethink its business model. To better capitalize on this sales growth, Fred Meyer placed fine jewelry stores in their large department stores by the 1980s, it was in many shopping malls throughout the western United States.
By the mid 1990s, Fred Meyer Jewelers had acquired 23 jewelers in California and other midwestern states. It soon bought out Merksamer Jewelers. The jewelry company also acquired Fox’s Jewelers, which was smaller, but was already established in several midwestern states.
By the time the 1990s were coming to an end, the company then made the decision to acquire Littman Jewelers, effectively becoming a more nationwide chain. Soon, the parent company was acquired by Kroger Company and then Bank of America entered the picture in order to streamline its credit considerations such as credit cards and payments processors.
Soon, though, the conflict in Sierra Leone resulted in a number of “conflict diamonds” entering the American market. The diamond industry as a whole, along with government agencies and non-government agencies put into place an international system that prevented “blood diamonds” or conflict diamonds from entering the mainstream retail channels. At a time when the bloody efforts of gaining diamonds could have annihilated the diamond market, the streamlined approach and transparent efforts ensured the market as a whole didn’t crumble.
This eventual process was to be known as the Kimberly Process. This requires governments to ensure every diamond shipment into the U.S. were moved in secure containers with a government numbering system and guarantees that they did not come from areas of conflict. Under the Kimberley Process, diamond shipments can only be exported and imported within co-participant countries that signed the Kimberley Process. Not only that, but no uncertified shipments of rough diamonds were permitted to enter or leave a country. By 2002, there were 52 governments that had adopted the Kimberly Process Certification System. This ensured not only the quality and integrity of the diamonds and the processes, but it also kept in place the profitable aspects of owning diamonds, specifically, the ability of consumers to finance them.
The system was fully implemented in August of 2003.
These days, there are 71 governments that have partnered with the diamond industry. They are morally, ethically and legally bound to adhere to the UN defined process. As a result, Kimberley Process participants currently account for well over 99% of the global production of rough diamonds. There are generally peer monitoring efforts in place, especially for those just entering the agreement, to ensure compliance. Diamonds are closely audited and must be made available to governments to audit as well. Significant sanctions can apply for those companies not adhering to the guidelines. This has kept the retail diamond market profitable in the U.S., even during economic difficulties.
It’s expected TD Bank will begin its new partnership with the jewelry chain in the coming weeks.