New Alliance president will "stay the course"
Ed Heffernan, president & CEO, Alliance Data Systems Corp.
Alliance Data Systems Corp., parent company of Epsilon and provider of loyalty and co-brand credit card solutions, has named Edward Heffernan its new CEO and president.
Heffernan, currently CFO of the company, will succeed longtime Alliance CEO J. Michael Parks on March 1. Parks will stay on as chairman of the board. Heffernan's more than 10 year tenure with Alliance, including eight years as CFO, helped position him for the role. Under Heffernan, Alliance revenues have grown, on average, 16% a year over the last decade, according to the company. Heffernan also helped take the company public in 2001.
“The president and chief executive officer position is a natural step for Ed [Heffernan], who, as part of his role, will continue to serve as the primary voice and face for Alliance Data with the investor community and Wall Street,” said Parks in a statement. “His experience regarding capital markets, liquidity, mergers and acquisitions combined with helping our team build and run Alliance Data over the last 10 years, uniquely qualify him for this position and will provide for a smooth and seamless transition.”
"He has been the architect of our highly respected business model and has gained respect within the company and in the financial community, so it's a natural fit,” added Shelley Whiddon, director of external communications, Alliance. “I think our track record and success speaks for itself and is a reflection of the leadership and both Ed and Michael [Parks].”
Heffernan will directly oversee the day-to-day operations of each of Alliance's three businesses: Epsilon; LoyaltyOne, which owns and operates the Air Miles Reward Program; and Alliance's credit services arm. He will work directly with the presidents of each, including newly named Epsilon president Bryan Kennedy. Heffernan also will remain the company's primary liaison with the investment community.
No major changes to company policy were expected under Heffernan's leadership and the company expects continued growth, despite the current economic conditions, Whiddon said.
“This is an opportunity for us to… stay the course and continue to deliver solutions that help our clients become successful,” she said.
Alliance Data reported total fourth-quarter 2008 revenue of $508 million, a 3% decline from the fourth quarter of 2007, but predicted 17% to 18% cash earnings per share growth in 2009. The only part of the company to post significant losses was private label credit, where revenue declined 12% to $171 million for the fourth quarter.
Revenue for the company's loyalty services arm increased slightly for the period and is expected to see organic revenue growth in the mid-teens for 2009. Epsilon, too, saw growth in 2008, particularly thanks to its database services, analytical services and interactive services. Its Abacus and direct mail businesses were aversely affected by the harsh retail climate, but growth for the company overall is expected in 2009.
Michael Kubic, SVP, corporate controller and chief accounting officer for Alliance will serve as interim CFO while the company looks for a permanent replacement for Heffernan. Whiddon would not say whether the company is looking internally. The last two major promotions at the company – Kennedy at Epsilon and Heffernan – were internal.
Before joining Alliance in 1998, Heffernan worked for First Data Corp. and Citicorp in a variety of merger- and acquisition-focused roles.