American Express hasn’t even lost Costco charges yet, and it’s reeling. Here’s the inside story on how Amex lost the Costco deal. Delta is their second largest co-brand, but with Marriott buying Starwood they presumably lose the ability to issue Starwood co-brands at some point when the programs are expected to merge. Although American Express wants to find a way to keep the Starwood card post-merger.
American Express revenue is down and earnings are down. Their problem is lack of growth and paradoxically their strategy is cutting costs. They may have unnecessary expenses, and if they’re going to be a slow growth company for the foreseeable future they need a sustainable cost base. But the cuts won’t return them to growth. So the cuts aren’t a winning strategy unless the idea is to sell the company.
