November 17, 2014 / 12:37 PM / 4 years ago

CORRECTED-JPMorgan to allow credit card deal with Sears Canada to lapse

(Changes sourcing to Sears from JPMorgan in first and second paragraphs)

TORONTO, Nov 17 (Reuters) - Sears Canada Inc said on Monday its deal with JPMorgan Chase relating to the Sears Card and Sears MasterCard credit cards in Canada will terminate in a year, in a setback for the struggling clothing and household goods retailer.

Sears said JPMorgan will service the Sears Canada credit card business until at least November 15, 2015, when the current deal expires. JPMorgan will have no obligation to do so after that date.

Sears Canada, hit by tough competition, has seen its market share erode for years. The retailer has sold its locations at many of the country’s top malls, but it still owns 176 corporate stores and 222 hometown stores, along with other locations in Canada.

Sears and JPMorgan plan to explore a sale of the credit card portfolio to another party. In the event of a sale JPMorgan has agreed to pay Sears Canada up to C$174 million ($153.9 million), under certain circumstances.

$1 = $1.1310 Canadian Reporting by Euan Rocha

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