Adds details from complaint, Dillard's sales, attempts to obtain comment, case citation, byline

By Jonathan Stempel

May 22 (Reuters) - The department store chain Dillard's DDS.N sued Wells Fargo WFC.N on Thursday, saying the bank repeatedly breached a since-abandoned co-branded credit card relationship, causing tens of millions of dollars in losses.

In a heavily redacted complaint filed in Manhattan federal court, Dillard's said Wells Fargo became an "unwilling and incapable partner" after reaching consent orders in 2016 and 2018 with the U.S. Consumer Financial Protection Bureau and Federal Reserve to address problems in its banking practices.

The Little Rock, Arkansas-based retailer said it was then "shocked" to learn last June that the fourth-largest U.S. bank had effectively decided to abandon the co-branded card market without informing its "premier partner"--Dillard's itself.

Dillard's said it welcomed the end of its decade-long relationship with Wells Fargo in light of the San Francisco-based bank's actions, but that Wells Fargo's "bad-faith conduct" continued even during the termination process.

Wells Fargo did not immediately respond to requests for comment. Julie Guymon, a Dillard's spokeswoman, declined additional comment.

Founded in 1938, Dillard's recently had 272 stores in 30 U.S. states. Net income totaled $593 million on revenue of $6.59 billion for the year ending February 1, 2025.

In January 2024, Dillard's entered a co-branding relationship with Citigroup C.N, with that bank purchasing existing Dillard's credit card accounts and Mastercard MA.N serving as the payment network.

The case is Dillard's Inc et al v Wells Fargo Bank NA, U.S. District Court, Southern District of New York, No. 25-04330.

(Reporting by Jonathan Stempel in Chicago; editing by Diane Craft)

((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.net))