Sears Canada Inc. (TSX: SCC) announced today that it has entered into an agreement to sell its Credit and Financial Services business to JPMorgan Chase & Co. (NYSE: JPM) for approximately $2.2 billion in cash proceeds net of securitized receivables and other related
costs and taxes. Sears anticipates that an after-tax gain of approximately $650 million will be recorded when the transaction closes. In addition, as part of the transaction, Sears and JPMorgan Chase will enter into a long-term marketing and servicing alliance with an initial term of 10 years during which Sears Canada expects to generate significant on-going cash flow from the alliance. The transaction has been approved by both companies and is expected
to close by year-end 2005, subject to regulatory approvals and closing conditions.

The Strategic Alliance:
Under the long-term marketing and servicing alliance, JPMorgan Chase will provide credit and customer service benefits to Sears Card and Sears MasterCard holders in Canada. As part of the alliance, Sears Canada expects to receive more than $100 million in annual performance payments from JPMorgan Chase based on items such as credit sales, new account generation and sales of additional financial products. In addition, JPMorgan Chase will provide deferred financing for Sears customers at historical levels.

Sears Credit and Financial Services business includes 10 million total accounts, and $2.5 billion of receivables. This portfolio represents the third largest in the country, and includes the largest in-house private label portfolio. Both the Sears Card and Sears MasterCard will continue to be offered through JPMorgan Chase and the transition will be transparent to Sears
customers. JPMorgan Chase will manage operating centres in four Canadian locations including Toronto, Scarborough, Ottawa and Vancouver with approximately 1,000 employees.

"This is a great alliance for Sears, our customers, our employees and our shareholders," said Brent Hollister, President and Chief Executive Officer, Sears Canada. "Our customers will enjoy broader credit and financial products opportunities and continued high levels of service, while Sears continues to receive significant income related to credit card sales. We anticipate that substantially all of our Credit and Financial Services associates will become employees of JPMorgan Chase. JPMorgan Chase is a global leader in proprietary, co-branded and general purpose cards, with world class technology, powerful financing capabilities and excellent customer relationship management skills creating a tremendous opportunity for our people in the credit business.

"From our shareholders' point of view, this strategic action will also create significant value as we expect to return substantial proceeds to shareholders, while accelerating progress toward building a Sears that is completely focused on the profitable growth of our core retail and related services business and further simplifying our organization," continued Mr. Hollister. "Over the next few months, we will be taking steps to align our cost structure with the Canadian and North American competitive retail industry sector."

"This purchase offers many opportunities for Chase including partnering with another of the world's leading brands, expanding our private-label business and entering a new and exciting market in Canada," said William I. Campbell, Chairman, Chase Card Services. "We look forward to working closely with Sears Canada and its employees to offer great products and services that consumers find valuable."

Use of Proceeds:
Although Sears has not yet made any final determination as to the use of proceeds, it contemplates that the net after-tax proceeds will be used primarily to make a substantial cash distribution to shareholders and for general corporate purposes. The amount and timing of any distribution are still to be determined.

Goldman, Sachs & Co. served as advisor to Sears Canada on the transaction.

This release includes discussion of forward-looking information and potential future circumstances and developments. Discussion of such matters is qualified by the inherent risks and uncertainties surrounding future expectations generally, which discussion also may materially differ from the Company's actual future experience involving any one or more of such matters.

Sears Canada is a multi-channel retailer with a network of 122 full-line department stores, 217 off-mall stores, 62 home improvement showrooms, over 2,200 catalogue merchandise pick-up locations, 113 Sears Travel offices and a nationwide home maintenance, repair, and installation network. The Company also publishes Canada's most extensive general merchandise catalogue and offers shopping online at www.sears.ca.

About JPMorgan Chase & Co.

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $1.2 trillion and operations in more than 50 countries. The company has approximately 95 million credit cards issued. Under the JPMorgan, Chase and Bank One brands, the firm serves millions of consumers in the United States and many of the world's most prominent corporate,
institutional and government clients. Information about the firm is available at www.jpmorganchase.com