The relation between the giant retail company, Walmart, and its former issuer of a credit card, Synchrony has been on the downfall for a really long time and matters became worse in the past few weeks as more bad blood was issued between the two of them.
All of this started when Walmart lodged an official lawsuit against Synchrony, claiming that it didn’t stick to its promise of letting Walmart extract maximum benefits from the contract and not causing any undue obstruction in the process. The damages are valued at almost $800 million.
Heavy negotiations have been going between the two parties since July about the appropriate line of action to be taken with respect to almost $10bn which is present as balance. A decision has to be taken whether to negotiate to sell it off or retain it. Walmart has already appointed a new organization called Captial One, to handle its finances as well as the issuing of the credit card.
Synchrony has issued an official statement which said that all the allegations are baseless and is a strategy adopted by Walmart in order to bypass its contractual obligations. It also expressed disappointment at Walmart for not resolving the commercial mess in a more confidential and cordial manner and filing a lawsuit. Walmart has, in turn, reprimanded the statement by saying that Synchrony has been unscrupulous in their working methods and has failed to take responsibility for their actions.
Financially, Synchrony has been at a major loss here as they lost major values in shares and was also dependent on Walmart for almost 10 percent of the total earnings of the bank from the loans taken. As things stand now, matters will only get worse, if appropriate steps are not taken to resolve the issue as soon as possible.