SPS to Issue Cards for Warren Cos., a Consumer Electronics Distributor

Article excerpt

SPS Transaction Services Inc., the nation's third-largest provider of private-label credit card processing, has signed a five-year agreement with the Warren Cos.

Based in Sioux Falls. S.D., the Warren Cos. distribute consumer entertainment products. such as stereo equipment. cable telecommunications products, and videocassette recorders.

Recently, the company obtained the rights to market a high-performance satellite television system from RCA. It hopes the new private-label card - to be issue.d by SPS on behalf of Warren - will help sell this product.

Confident About Growth

Though the card program, known as Entertainment Plus, is only a few weeks old, SPS executives are confident that within a year, the portfolio will be worth around $20 million.

SPS executives said that the Warren deal and five others it has signed this year are evidence that the private-label, third-party processing business is expanding faster than many in the industry believe.

Some Skepticism

"Private label is a continually growing business, though I've heard comments to the contrary," said Robert W. Archer, vice president of sales at Riverwoods, Ill. -based SPS, which is a unit of Dean Witter. Discover & Co.

"More companies are looking at the private label card as a way to create that long-term relationship with the customer that everyone agrees is so valuable," he added. "We see private label continuing to grow."

The "comments to the contrary" come from industry analysts, such as Richard K. …