Rebuilding Credit

San Francisco's Providian Financial was once the most despised company in the credit card industry. Now, after a humbling fall, it just wants to be loved.

Of course, for Providian shares -- once worth more than $66 -- being a good buy at $7.60 hardly measures as a victory. The company still has major challenges in front of it, most significantly remaking itself as a more upscale lender, particularly in the so-called middle market, a notch above subprime and the most likely place for Providian to find success.

The problem facing the company in that market, however, is that those customers tend to have more credit choices, and Providian -- used to dealing with customers desperate for a bare-bones card with an enormous rate -- doesn't have many options to offer. Ideally, says Dawn Greiner, a marketing vice president, the company will eventually have 10 to 15 distinct products for customers in these more competitive markets. At the moment, it has five. Greiner's boss, Warren Wilcox, says the company is at least six months away from launching any new products.

Without providing specifics, executives say they'll try to use lower rates as a competitive tool in the meantime. And the card issuer with the formerly evil reputation has one other secret weapon: pretty pictures.

Spokesman Alan Elias says new card designs, such as see-through Smart cards, can help give Providian a fresh image.
Brandon Fernandez
Spokesman Alan Elias says new card designs, such as see-through Smart cards, can help give Providian a fresh image.
Konrad Alt runs Providian's office of risk management and reputation.
Brandon Fernandez
Konrad Alt runs Providian's office of risk management and reputation.

"I guess maybe before we were kind of vanilla," says Elias, who is fondling a deck of credit cards. "Now we're looking at new things we can do, whether it's the plastics themselves -- you may have seen our Smart cards, which are kind of see-through -- or the designs on the cards. We're testing a lot of plastics now that have geography designs on the cards."

Like a card shark revealing his hand, Elias sprawls his holdings on the conference table. A few of the cards are partially see-through; one bears a picture of the Brooklyn Bridge; another sports a fancily shot jalapeño pepper, an apparent nod to the Southwest. The Statue of Liberty adorns another.

Holding up the hot pepper card, Elias says, "This is a way for us to start to build a different image for the company."

There Providian goes again, getting all warm and fuzzy.


Warren Wilcox, Providian's vice chairman for planning and marketing, is one of those not-so-rare corporate creatures who have absolutely mastered the art of the clarifying hand gesture. To chat with Wilcox is to take in a series of points, boxes, roof-raises, and sweeps that subtly illuminate the company's strategy, not unlike Dana Carvey's imitation of the elder President Bush on Saturday Night Live.

From his 28th-floor office with a Bay Bridge view, Wilcox is talking about the shape of the company he joined in January, when he came over from Fleet with fellow executive Susan Gleason, Providian's new operations chief, to join Saunders. On the strategy side, he explains, using the phrase "go-forward basis" a little too often, the imperatives were clear: Providian needed to focus its energy on the middle market -- which it had worked in before -- and the prime market, a Fleet specialty.

What wasn't clear beforehand was whether the company had the will to pick itself up off the ground again. "There was disappointment and anger and frustration and a whole set of emotions," he recalls. "Those are absolutely logical in an environment where you had been successful, and then the wheels come off to some degree. ... But the question is, how do you react? You can say, '"The show's over,' and just go home. Or the other thing you can do is get your dander up a little bit. You can say, '"You know what? We shouldn't have let this happen, but we can be successful again,' get your dander up a little and take this thing forward. In general, it's that second type of reaction that I sensed here."

But while Wilcox wants you to know that the company was used to succeeding and is doggedly determined to succeed again, he also wants one other thing to be clear: This is a newer, nicer Providian.

Or at least it better be.

"Before, 90 percent of the emphasis was on grow, grow, grow, grow," he says. "Now, I think, we understand that, on the most fundamental level, we excel or fail based on one-on-one interactions with customers. That's the primary level. ... If we excel at that level, I think, ultimately, a better reputation will follow."

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