Spiegel Picks Alliance Data to Manage New Private-Label Cards
Spiegel Inc. expected to file a motion yesterday with the bankruptcy court in the southern district of New York seeking approval of the agreement, which will not be effective until the court grants approval.
"We're asking [the court] to approve it this week -- it's on a fast track," Spiegel spokeswoman Debbie Koopman said.
Dallas-based Alliance Data would offer services including establishing credit criteria, issuing and activating new cards, extending credit to new cardholders, authorizing purchases made with the new cards, customer care and billing and remittance services.
The new program would have no relation to Spiegel's previous private-label program, which Spiegel canceled last month. That program, managed by Spiegel subsidiary First Consumers National Bank, encountered problems after Spiegel tried to market the cards to the sub-prime market, which includes consumers with poor credit histories who pay high interest rates.
The new program will pursue consumers with higher credit ratings, said Shelley Whiddon, manager of external communications for Alliance Data Systems, though she would not specify FICO scores of targeted consumers. "The credit standards are going to be consistent with the credit standards that we use with our other private-label retail clients. We maintain a very high standard of credit."
Alliance has more than 50 private-label credit card clients including Crate & Barrel, Ann Taylor, The Limited Group, Victoria's Secret, Restoration Hardware and Pottery Barn. The company processed 1.7 billion transactions in 2002.
"We have had a lapse in our credit card service, so we know that having a credit card program is very important for our customers," Koopman said. "We offered private-label credit for a long time, and we know it's an important program.
"Each of the merchant companies are looking at ways to get customers signed up. Plans are under way in all three to develop targeted marketing programs to go out. It will focus on new and existing customers -- a combination of both."
Spiegel also announced Monday its intent to close 60 Eddie Bauer stores described as underperforming.
They will remain open pending approval of the store-closing plan by the bankruptcy court and thereafter until store-closing inventory sales are completed. Spiegel expected to file a motion with the court yesterday seeking approval of the plan.
Eddie Bauer currently operates 529 stores in the U.S. and Canada, including 382 apparel stores, 45 home stores and 102 outlet stores. The stores targeted for closure include 51 apparel stores, eight home stores and one outlet store. All are located in the United States.