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http://www.ft.com/intl/cms/s/0/7dbfcfb2-b510-11dd-b780-0000779fd18c.html#axzz1c63bb61r

Lots of US Retail Stores in the US have been struggled with low profits during 2008. 2008 as we know was when the recession really peaked. The economic uncertainty at that time forced people to cut down on discretionary spending. Lowe’s and Target, USA’s’ largest retailer posted grim third quarter results.

Targets’ third quarter earnings fell down 24 percent to $369m. There was sharp decline in revenues from its propitiatory credit card portfolio. According to target its profitability from the credit card portfolio suffered due to higher bad debt expenses resulting from current period write-offs and additions to the reserve for future periods. With the immediate future looking gloomy there seemed no respite. The retailer sold a little less than half of their receivables to JP Morgan Chase fr $3.6bn. Before the sales to JP Morgan Chase the receivables on card more than doubled from $130m to 314bn. Due to economic conditions prevalent at that time most retail outlets such as Target, Walmart etc were unsure whether their receivable due will be collected.