TopShop Store Card Group Banks On £1bn Sale

The finance group which provides credit cards to TopShop customers has hired bankers to prepare a sale or flotation that could value it at more than £1bn.

Sky News understands that the owners of NewDay, which is among the UK's biggest branded store card issuers, have appointed Lazard and UBS (NYSEArca: FBGX - news) to work on a potential deal.

The appointments signal an intention for Varde Partners, a hedge fund which acquired the company in 2011, to pursue an outright sale or stock market listing in the coming months.

Last year, NewDay, which struck a five-year deal with Arcadia Group, the Dorothy Perkins-to-TopShop empire of Sir Philip Green, was relaunched by Varde after previously being known as SAV Credit.

It has more than four million customers and said last year that it expected to add a further one million during the course of 2014.

As well as issuing co-branded cards for store partners, it owns the aqua card brand and provides marbles and Opus cards direct to consumers.

Two years ago, NewDay swallowed a retail co-brand card and point-of-sale finance business for high street retailers including Debenhams (Other OTC: DBHSF - news) , Arcadia, House of Fraser and Laura Ashley (LSE: ALY.L - news) , adding 3.4 million customer accounts and balances of £0.9bn.

If Varde secures a £1bn-plus valuation for NewDay, it will mean that the company has more than doubled in valuation since it was acquired from Palamon Capital Partners.

Varde said the rebranding was part of an attempt to position NewDay as a responsible participant in the consumer credit industry at a time when many operators had come under pressure from consumer groups over their lending practices and charging structures.

At the same time, it published a 'manifesto', saying that it wanted to be perceived by stakeholders as a "welcoming company (while still lending responsibly); an understanding company, which helps its customers when they run into difficulties; a 'knowing company', which uses its knowledge of its customers to develop the products they need; and a 'rewarding company', especially to those who manage their card accounts well".

Industry analysts say that Varde is likely to be keeping a close eye on the outcome of the General Election, with further pressure likely to be exerted on consumer credit providers as part of the consumer fairness agendas of the main parties.

A NewDay spokeswoman declined to comment on the appointment of Lazard and UBS.