Target Corp. said Wednesday that it is continuing to evaluate “alternative ownership structures” for the retailer’s $7 billion credit card portfolio, and now expects the review to be done during the first calendar quarter of 2008.

This story first appeared in the December 20, 2007 issue of WWD. Subscribe Today.

In September, Target was looking to complete the evaluation by December of this year, but it is taking longer than expected due to “current market conditions.”

Analysts said the review may have been triggered by pressure from activist investor William Ackman, from New York-based Pershing Square Capital Management, who upped his stake in Target to 9.6 percent in July.

The Target credit card receivables include Target Credit Card and Target Visa Card (known together as “REDcards”), gift cards and other financial services. This receivables portfolio has made about 18 percent of the company’s pretax profits in the last 12 months and a third of it year-to-date, however, due to this ownership, the retailer is responsible for all credit defaults.

Regardless of the outcome, Target is expecting an increase in before-tax profits from the credit card portfolio in the fourth quarter of 2007 through 2008.

Other retailers, including Macy’s Inc. and Kohl’s Corp., have sold their credit card units. But at this stage, credit markets have faced a slowdown, which might decrease chances of a sale.