HSBC to Buy Metris
HSBC Holdings Plc., the United Kingdom's biggest bank, plans to spend $1.59 billion to purchase credit-card issuer Metris Co., one of North America's top 20 credit card issuers.
The deal between HSBC Finance, North America's sixth-largest issuer of MasterCard and Visa cards, and Metris, the eleventh largest, should be complete in the fourth quarter, after the resolution of a Securities and Exchange Commission (SEC) inquiry into Minnesota-based Metris.
Common shareholders of Metris will receive about $911.1 million, or about $15 per share, the companies said in a joint statement. HSBC also will pay $682.6 million to buy out the preferred stock in Metris held by Thomas H. Lee Partners LP, a private-equity firm.
HSBC's purchase of Metris will increase the size of the London-based bank's credit-card business in the U.S. by almost a third. HSBC also gained more than 50 million customers with its 2003 purchase of Household International Inc. for $15 billion.
Metris was created in 1998 when it was spun off from Minnesota-based catalog retailer Fingerhut Co. Metris's stock tumbled to as low as $1.25 in January 2003, from a high of about $43 in September 2000. Chief Executive Ronald Zebeck was fired in December 2002.
In July, Metris revealed that the SEC had recommended bringing a civil action against the lender and its chief executive, David Wesselink. Since 2003, the SEC had been looking into how Metris accounted for loan losses in 2001, how it valued its interest in some loans, and other matters. The company posted combined losses of $149.3 million in 2002 and 2003.
JPMorgan Chase & Co. is now the nation's leading credit card issuer, with about $135 billion of receivables. Citigroup Inc. is second with $116 billion.
In June, Bank of America Corp. agreed to buy MBNA Corp. for $35 billion. Also, Seattle-based Washington Mutual Inc. is in the process of purchasing Providian Financial Corp., the seventh-biggest issuer, for $6.45 billion.
HSBC Retail Services provides customized credit card solutions for retailers and manufacturers, including leaders in the powersports industry. For more information, visit www.hsbcretailservices.com or call 800/333-8592.
GE Takes Finance Management to the Internet
AdvanceDesk is GE's new Internet-based finance management system that allows dealers to enter applications, check the status of loans, print documents, order supplies and complete other tasks related to GE financing.
The AdvanceDesk Web site can be reached through ordinary Internet access, said Greg Pierce, vice president of the GE Consumer Finance Division. Once there, dealers have a one-stop tool for instant, online, real-time loan applications and processing.
“We used to manually complete all of our applications and then sit and wait for credit decisions,” said Julie Mellinger, finance manager at Motor Cycle Center in Villa Park, Ill. “Once customers were approved, then it was time to get out the old typewriter to prepare the documents. That entire process could take up to an hour for each deal. Now with the AdvanceDesk, we're doing everything electronically, and I'm able to take care of customers from start to finish in just a few minutes. The convenience is unbelievable.”
AdvanceDesk streamlines GE's process. As a result, Mellinger said her error rate on contract documents has declined to almost zero, and customers are funded faster than ever.
“When you're doing everything by hand, it's all too easy to make a mistake,” Mellinger said. “Since I started using AdvanceDesk, I don't think I've even had one error. That means I don't have to track down customers to have them re-sign corrected documents. It also means my job is a lot more fun than it used to be.”
AdvanceDesk has made Motor Cycle Center's customers happier, too, Mellinger said.
“When customers come into our store, they're looking to buy fun,” she said. “So, the last thing they want to do is spend an hour filling out paperwork and then wait for credit decisions. With AdvanceDesk, we can get their financing done quickly and painlessly.”
In coming months, AdvanceDesk will also allow dealers to quickly process repeat purchases for accessories and service with a swipe of the customer's card. This enhancement utilizes a magnetic stripe reader to process both GE-issued credit cards and all other credit cards, on one platform.
Sparta's iPLUS Speeds Application Processing
Sparta Commercial Services, Inc., an Internet-based sales finance and leasing company for the powersports industry, has launched its proprietary point of sale, web-based origination platform, iPLUS (Internet Purchasing Leasing Underwriting Servicing).
The iPLUS software allows immediate point of sale credit application decision-making and contract processing. Structured as an Application Service Provider, iPLUS is able to provide dealers with conditional funding approvals, via the Internet, 24 hours a day, seven days a week.
After submitting a brief customer financial profile via iPLUS, dealers receive a credit decision in less than two minutes. For the approved customers, the dealer is given the maximum monthly payment specific to the individual customer, and the dealer is then able to target the sales effort to the customer's individual needs and financing capacity. Should questions arise, Sparta provides telephone-based assistance through its Dealer Services Group.
“We are pleased to have this key element of our business platform fully operational,” said Anthony Havens, Sparta CEO. “Our investments of time, money and resources have proven to be worthwhile, as iPLUS represents a tremendous, efficient and scalable business tool for Sparta, as well as a competitive advantage for both Sparta and our dealers. Dealer reception to iPLUS has been very strong, as it answers their need for prompt, reliable funding decisions that enable them to maximize their sales potential.”
New Software Combats Theft
With interest in retail loss prevention at an all time high, store operators are looking for better solutions to cut costly losses from employee and consumer theft. One-Step Data, Inc., Glendale, Calif., offers loss-prevention software that synchronizes information with digital surveillance video output, frame-by-frame, to easily locate theft and shoplifting, and reduce shrinkage.
Traditional analog CCTV video systems require store operators to view hours upon hours of recorded tape to locate evidence of loss transactions, which few managers take the time to do. Now, Retail Pro, distributed by One-Step, has incorporated a loss-prevention video solution called Remote Manager IP that links Retail Pro to the video camera, integrating specific sales information with a continuous digital surveillance output. The result is real-time monitoring of every workstation keystroke and merchandise scan synchronized to video images. This allows retailers to quickly and easily view video and sales information on one screen to determine if items were entered or scanned correctly, and call up and view all transactions that may be considered questionable or high risk.
As part of the Remote Manager IP system, a special cashier monitoring application generates messages from each monitored workstation. Messages include: start of transaction; operator check in; operator check out; receipt line data (line by line as the receipt is created); tender record; tender change; account information (credit card information); cash drawer mode; item record (UPC); total amount; and end of transaction.
The Remote Manager IP playback screen is user friendly and displays line by line receipt information, operator number and transaction date and time.
“Retailers can cue up all the questionable transactions for the day, all the discount sales for the day, all the exchange transactions for the day, when employees are checking in and checking out,” said Scott Kreisberg, CEO of One Step Data, Inc. “Basically, Remote Manager IP provides a digital link between the video software that captures the images and the sales information already integrated with Retail Pro. Loss-prevention technology of this detail and sophistication has not been available to retail operations prior.”
Remote Manager IP sells for approximately $6,000 per location. Various training, service and support options are available.
ARKONA Moves, Posts Q2 Profit
Effective Aug. 1, 2005, ARKONA, Inc., a supplier of management solutions in the powersports and automotive industries, relocated its corporate headquarters to a new 25,000-square-foot office space less than a mile from its former South Jordan, Utah, location. The need for additional space was required to meet the expected growth of the firm, particularly in support services and product development personnel, company officials said.
ARKONA's Dealer Management System offers e-business solutions for dealers that fully integrate back office systems with a retail Web presence.
A public company, ARKONA posted revenues of $2,527,199 and net income before taxes of $220,402 for its fiscal quarter ended June 30, 2005. This compares to revenues of $1,634,599 and a net loss of $32,351 for the same period a year ago. On an after-tax basis, the company reported net income of $370,402.
“First quarter was a breakout quarter,” said Alan Rudd, ARKONA chairman and CEO. “The results validate the investment we made over the past several quarters in our infrastructure. Establishing regional sales offices with industry-proven management was a significant factor in the record results. With the release of ARKONA's fully integrated CRM offering and the continued strong demand we see for our dealer management solution, the company is well positioned for a strong fiscal 2006.”
“When you consider that the first quarter's growth has not come at the expense of the balance sheet, the results are even more significant,” said Lee Boardman, ARKONA CFO. “The company has not had to raise additional funds to finance the growth, either by debt or equity offerings, for a year or more.”
Softpower Offers Web Services
Softpower Business Solutions' Web Services technology uses the Internet to advance the exchange of information from dealer to manufacturers directly, more efficiently and cost- effectively.
Bob Senger, president of Softpower, feels Web Services is the biggest technology advance for small businesses in the last ten years because it makes e-commerce technology affordable for even the smallest dealer.
Dealers can send warranty claims, product registration, product availability requests or purchase orders to manufacturers and receive a response within five seconds.
Dan Ariens, president of Ariens Company has used Web Services and said that, “The development of Web Services standards is another tool in [our] arsenal to fight waste, inefficiency and loss.”
In other Softpower news, Teri Denfeld was appointed general manager and Pam Evankow, sales marketing manager.
Denfeld joined Softpower six years ago. For the past three years she has been a trainer and business adviser for Softpower, as well as run her own consulting business. She has nearly 25 years experience in the power equipment industry and served as president of her family's dealership,
Evankow has been dividing her time between administrative and sales responsibilities for Softpower for over eight years.
The corporate restructure will allow Senger to guide Softpower programmers and to participate in the development of electronic data interchange software for the industry.
CycleTrader.com Partners with BikeBandit.com
CycleTrader.com has formed a partnership with BikeBandit.com in a move Cycle Trader officials say will simplify the process for enthusiasts searching for parts and accessories,
“We wanted to give our consumers a more complete selection of the parts and accessories they were looking for,” said Allyson Stanberry, Cycle Trader Web Services business development manager. “BikeBandit.com seemed to be a natural fit for this purpose.”
To help drive traffic to this new parts area, CycleTrader.com has also added parts search links on the left navigation as well as the center navigation. With these links, enthusiasts will be able to quickly click and link directly to the parts and accessories they are looking for. This new partnership with BikeBandit.com will be available on CycleTrader.com as well as ATVTraderOnline.com.