FAIRFIELD, Ohio -- Mercantile Stores Co. will take over its credit operation from Citicorp Retail Services in June 1995 when its agreement with Citicorp ends.
The company said it was making the move to gain control of an increasingly important part of its business, to move more quickly and competitively with its credit operation, to make better use of its database and to take advantage of some profit potential.
In anticipation of the takeover, Mercantile has promoted Charles O. Unfried to president of Mercantile Credit Services, a new position. MCS is based in Baton Rouge, La.
Unfried, formerly senior vice president of credit and customer service for the 16-store Maison Blanche company, acquired by Mercantile in January 1992, is spearheading the development of a new credit center operation, which, when fully operational, will employ 300 to 400 people. The credit operation will be housed in about 80,000 square feet of the former Maison Blanche headquarters, now underutilized as a warehouse.
Meanwhile, Standard & Poor's Ratings Group has placed its Double-A-Minus rating of Mercantile Stores Co.'s senior debt on credit watch with negative implications.
About $259 million in debt is affected.
S&P said the action was triggered by Mercantile's weak 1993 results. The rating company cited the chain's fourth-quarter sales, which were down 0.8 percent, while same-store sales declined 3.6 percent. Heavy discounting reduced gross margins, but failed to boost sales, S&P said, adding that Mercantile's operating margins dropped to 9 percent in 1993 from 12 percent a year earlier.
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