Private label credit card programme sold to Alliance Data
US loyalty and marketing services provider Alliance Data has signed an agreement with US apparel retailer Charming Shoppes to acquire the latter’s credit card receivables programme.
Charming Shoppes and Alliance Data have also concluded a ten-year operating agreement for the servicing of Charming Shoppes’ private label credit card receivables programme.
Charming Shoppes expects to receive net cash proceeds of approximately US$110m related to the transaction. The transaction consists of the sale of Charming Shoppes’ private label credit card portfolio, along with other assets and liabilities that are required to support the card programmes.
Under the terms of the operating agreement, Alliance Data will assume operation of Charming Shoppes’ private label credit card programmes. This includes the operation of combined programs totalling around 4.5 million active accounts generating approximately $680m of annual credit sales, or 32% of the company’s retail stores nets sales for a 12-month interval.
Alliance Data will provide private label credit card services such as account acquisition and activation, card authorisation, private label credit card issuance, statement generation, remittance processing, customer service functions and marketing services, as well as receivables funding.