Walmart announced the first phase of its store redesigns in a company blog last year, saying that nearly 1,000 stores have been renovated with the new design.
Walmart has filed a lawsuit against credit card partner Capital One.
In a Friday filing in the U.S. District Court for the Southern District of New York, Walmart said it did so in a move to request a "judicial declaration of its right to terminate the contract" it has with Capital One for the bank exclusively issuing its private label and co-branded credit cards. Walmart had given Capital One a contract termination notice the prior day, according to both the Arkansas-based retailer’s court document and a Securities and Exchange Commission (SEC) filing from Capital One.
A Walmart spokesperson told FOX Business on Monday that it "ended our agreement" over the bank’s alleged "failure to meet a number of contractual obligations." Walmart specifically pointed to alleged failures to meet some customer service standards included in the agreement "five or more times in a rolling twelve-month period" and argued in its court filing that it had the right to break off the Capital One deal.
Walmart has filed a lawsuit against credit card partner Capital One. (Reuters / Mike Segar / File / Reuters Photos)
In its SEC filing, Capital One pushed back on Walmart’s argument that the retailer had the right to end the deal.
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Walmart accused Capital One of instances of missing the standards "regarding timely payment processing and transaction posting," according to the court document. It also claimed the bank came in below the service standard level in the contract for mailing replacement credit cards within a certain amount of days during the 12-month period.
"Capital One has developed a leading credit card product for Walmart and its customers and is proud of the value that we’ve delivered to both," a Capital One spokesperson told FOX Business.
The Capital One spokesperson said the suit is "an attempt to renegotiate the economic terms of the partnership it agreed to just a few years ago or end the deal early." The "servicing issues" are "immaterial and cured by Capital One pursuant to the terms of the agreement without harm to customers, the program or Walmart," according to the spokesperson.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WMT | WALMART INC. | 150.51 | -0.29 | -0.19% |
| COF | CAPITAL ONE FINANCIAL CORP. | 95.22 | +0.29 | +0.31% |
"Capital One disputes that Walmart has any right to change the terms of the existing partnership mid-stream, and we will vigorously protect our contractual rights in court," the spokesperson said.
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The credit card agreement between Walmart and Capital One dates back to late July 2018, when the two companies first unveiled the deal. It kicked off about a year later.
The Walmart credit card agreement brought in a post-tax net income of about $214 million for the year ending Dec. 31, 2022, according to the Friday SEC filing. In January, Capital One reported that its overall net income available to common stockholders for that year was $7.04 billion.
The credit card agreement between Walmart and Capital One dates back to late July 2018, when the two companies first unveiled the deal. (Paul Weaver / SOPA Images / LightRocket via Getty Images / File / Getty Images)
"We look forward to bringing our customers a new credit card option that provides meaningful benefits and rewards soon," the Walmart spokesperson told FOX Business. "In the meantime, cardholders should not experience any disruptions in service and can continue to use their existing Capital One Walmart credit cards."
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The Wall Street Journal earlier reported on the lawsuit. A desire for renegotiation of some of the agreement’s provisions had recently been expressed by the retailer to Capital One, according to the outlet, crediting "people familiar with the matter."
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