NEW YORK (TheStreet) -- General Electric's (GE) initial public offering of its consumer lending arm, Synchrony Financial (SYF), is in many ways a bet on the sustainability of big box retail, which continues to suffer from a cash-strapped consumer and the death of the American mall. Synchrony Financial may be the safest way to invest in a retail recovery as the company's key partners like J.C. Penney (JCP), Walmart (WMT) and Gap (GPS) continue to struggle with weak growth.
The GE-owned company plays in perhaps the most profitable part of the struggling world of big box retail. Synchrony Financial provides private label credit cards to large retailers across the U.S. and its customers can be seen as some of the most loyal shoppers left in the retail universe. Synchrony's average customer has had their branded credit card for 7.7 years, and the average customer made over a dozen purchases per retail credit card.
Synchrony's average customer also appears to be in a relatively sound financial position. The company's average customer account had a FICO score of 710, and total loan receivables had a weighted average FICO score of 694. Over 70% of those total loan receivables were with accounts carrying a prime FICO score.
That loyalty and financial standing makes Synchrony's average customer highly coveted by its retail partners. Synchrony's top five partners, Walmart, Sams' Club, Lowe's (LOW), J.C. Penney and Gap, accounted for over 48% of the company's 2013 revenue and 19 retailers accounted for 95.3% of annual sales.