Alliance Data Inks Renewal Deal - Analyst Blog

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The Retail Service business of Alliance Data Systems Corporation ( ADS ), inked a long-term renewal deal with Samuels Jewelers Inc. The agreement entails it to continue supervising the private label credit card program for the latter.

Samuels Jewelers is a leading retailer of diamonds and fine jewelry.

The private label credit card program provides adjustable financing and payment alternatives, special cardholder offers, reminders and invitations to cardholder-only events, and savings offers for special occasions. Additionally, Alliance Data will launch itself into redesigning card marketing collateral and reissue card plastics in the later part if this year. These encompass re-branding efforts of Samuels Jewelers' for its Diamond Elite Card.

Samuels Jewelers aims to be a dominant player in mall-based jewelers' space in the US, banking on customized payment promotions, multi-channel marketing strategy, and focused credit solutions.

To date in the third quarter, Alliance Data has inked a multiyear Amended and Restated Private Label Credit Card Renewal Agreement with Stage Stores Inc. (SSI), for private label credit card services. Further, it inked a multi year agreement to create and manage private label, co-brand, and commercial credit card programs for True Value Company. It also entered into a new long-term agreement with Ideal Image to provide a marketing-driven private label credit card program and a multi-year renewal agreement with Gordmans Stores Inc. ( GMAN ), to continue providing the private label credit card program.   

The Private Label Services and Credit segment has continuously delivered solid numbers. We believe cracking new deals along with the renewal of existing ones will fuel its performance. The segment's revenue in the second quarter improved 15% year over year while operating income surged 30%.

The Zacks Consensus Estimate for 2012 is currently pegged at $8.08, shy of the company guidance of $8.45. It also represents a year-over-year improvement of 12%.

Alliance Data holds a Zacks# 3 (short term Hold rating), indicating no clear directional pressure on the shares over the near term. Discover Financial Services ( DFS ), which closely competes with Alliance Data, currently holds a Zacks # 2 (short term Buy rating) indicating slight upward boost on the shares over the near term.
 


 
ALLIANCE DATA (ADS): Free Stock Analysis Report
 
DISCOVER FIN SV (DFS): Free Stock Analysis Report
 
GORDMANS STORES (GMAN): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ADS , DFS , GMAN , SSI

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