November 2, 2009
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News: Charming Completes Transition
The deal is complete. Charming Shoppes has completed the transition of a ten year agreement to sell its branded credit card accounts to Alliance Data. Charming Shoppes Inc. is the parent company of Lane Bryant, Fashion Bug, and Catherine's women's and young girls' apparel and accessories chains. The company made the decision to sells its credit card accounts' receivables in order to reduce debt and increase their focus on their core business. The deal contributed over $136 million to the company's net income. Gross proceeds were nearly $166 million; however, approximately $30 million was used to fulfill obligations related to the sale of the credit card program. Charming Shoppes' interests in Asset-Backed Securities and its off-balance sheet securitization funding has now been transferred to Alliance Data.
Jim Fogarty, President and Chief Executive Officer of Charming Shoppes, Inc., said that the company is pleased to have the credit card deal completed. Not only does the deal benefit the company's stockholders by removing risks, Charming Shoppes can now focus on building their core business. According to Fogarty, the deal also places the company in a strong liquidity position. Charming's credit card program has always been a valuable part of the company's marketing program. It will remain an intricate part of the business as Alliance Data's expertise continues to grow the program.
Alliance Data is based out of Dallas, Texas and is a major source of merchant branded solutions, interactive and direct marketing services, and stand alone loyalty programs. They manage nearly 90 merchant branded credit card and marketing programs. Alliance will assume the operations responsibility of Charming Shoppes branded card including account acquisition and activation; card authorization; private label card issuance; statement generation; remittance processing; customer service, marketing services, and receivables. Charming Shoppes will continue to maintain the responsibility of marketing the card. Alliance has also agreed to continued operations of the Charming Shoppes office located in Milford, Ohio that manages the card business.