Word: amex
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
...Many Amex customers, though accustomed to paying in full each month, proved much less disciplined in their approach to the Optima card. "We thought we had better demographics and experience with our customers," says James Robinson, Amex's chairman, who defended the company's assumptions. "Either our hypothesis was wrong or we didn't manage it right." But Robinson believes that external factors, most notably the current recession, hit Amex's clientele especially hard. "We had models for dealing with tough times but not for a white-collar recession. The model wasn't tested for hurricanes...
...headaches have been a series of revolts by disgruntled merchants demanding that the company lower the rate it imposes for handling customer transactions. Traditionally, American Express has charged merchants a premium -- as high as 4.25% for most retailers, about twice what Visa and MasterCard charge. In justifying its rate, Amex contends that its customers tend to be bigger spenders than bank-card holders. But as Visa and MasterCard have become more competitive in the prestige-card market, merchants have lost patience with Amex's higher premium...
...restaurants threatened to drop American Express unless it would renegotiate its rates. American Express refused, but quietly offered a standing discount for merchants who submit their receipts electronically. The company fears that if it gives in to one group, that could start a stampede by others demanding rate discounts. Amex's biggest fear is that airlines and hotels, which account for 45% of its merchant-fee income, will ask for renegotiated deals...
...control the damage, Robinson put bearlike Amex president Harvey Golub in direct charge of the Travel Related Services division, which includes card operations. Golub, known for his expertise on the ski slopes and in the kitchen, had been boss of one of Amex's few star performers, IDS Financial Services. To cut losses in the credit-card business, Golub plans a top-to- bottom overhaul at a cost of $110 million, which will include laying off 1,700 workers. Among other goals, Golub plans to boost the growth of Amex cards in force. Among the possible incentives: waiving...
...problems in Amex's core business come after a long string of mishaps in its diversified pursuits. The chief money drain has been its Shearson Lehman Bros. investment arm, which suffered mightily from its $962 million takeover of ailing and scandal-ridden E.F. Hutton in 1988. Shearson is just now starting to show signs of recovery from Wall Street's postcrash slump. Amex had hoped to flee the securities business, but after failing to find a buyer for Shearson, Amex injected $1 billion in capital to restructure the firm...