Newspaper article The Canadian Press

Canadian Tire and Scotiabank Team Up to Attract New Immigrant Customers

Newspaper article The Canadian Press

Canadian Tire and Scotiabank Team Up to Attract New Immigrant Customers

Article excerpt

Canadian Tire and Scotiabank partner in $500M deal

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TORONTO - The head of Canadian Tire wants to get newcomers to Canada more familiar with its little red triangle logo.

Introducing the iconic retailer's logo, and stores, to those recently arriving in Canada, was one of the main reasons why Canadian Tire decided to enter into a 10-year partnership with Scotiabank, says CEO Stephen Wetmore.

"Most people in the world aren't familiar with the Canadian Tire type of experience. In many countries, you have to go to five, six, eight stores to find what you would find in a Canadian Tire store," he said Thursday, following the company's annual general meeting.

"So the best way to experience Canada, if you ever moved here, is to walk around a Canadian Tire store. You are going to see the seasons, you're going to see what Canadians do. To make that initial connection is very important."

As part an effort to build brand loyalty with new Canadians unfamiliar with the bank or the retailer, Scotiabank announced it will buy a 20 per cent stake in the Canadian Tire's financial services division for $500 million in cash, and agree to provide up to $2.25 billion in credit card receivables financing to the business.

Canadian Tire (TSX:CTC.A), which sells everything from automotive parts to housewares, is counting on connecting with Scotiabank's (TSX:BNS) customers through special offers to drive up traffic at its stores. One of these deals includes handing out gift cards to recent immigrants, who open up Scotiabank accounts, to spend at the retailer or its apparel brand, Mark's.

Another offer involves giving $500 in Canadian Tire money to Canadian Tire Options MasterCard holders who switch or take a new mortgage from Scotiabank.

"We're both working to earn new loyal customers among new Canadians," said Wetmore. "The potential is unlimited when it comes to the range of products we can offer to each other's customers."

The partnership was a "logical" one considering both the brands' also connect over the importance of sports, with both previously involved in high-profile Olympic sponsorships.

Scotiabank president and chief executive Brian Porter said the deal is part of the bank's strategy to grow its high-margin credit card business and acquire new customers.

"We're in the business of acquiring new customers every day and that's where the we think the value of this transaction is," Porter said.

Under the deal, Scotiabank will become the exclusive partner for new financial products to Canadian Tire customers. It also includes an option for Canadian Tire to sell up to an additional 29 per cent stake in the financial services business to Scotiabank within the next decade at fair market value. At the end of the term, Scotiabank will also have the choice to back out of the partnership if it no longer considers it beneficial. …

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