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Alliance Data (ADS) Inks Deal to Offer Credit Card Services

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Alliance Data Systems Corporation’s card services business along with Sally Beauty Holdings, Inc. (SBH - Free Report) has launched two private label credit programs. The long-term agreement requires Alliance Data to provide private label card services to Sally Beauty’s two business units — Sally Beauty Supply and Beauty Systems Group.

Sally Beauty boasts being the largest distributor of professional beauty supplies in the United States, generating about $3.9 billion in revenues annually. Sally Beauty Supply sells to both retail consumers and salon professionals while its Beauty Systems Group’s Cosmo Prof stores sell exclusively to professional stylists and salons. The agreement will enable Sally Beauty to take advantage of Alliance Data's innovative suite of digital capabilities to cater to client preferences.

The card programs will complement Sally Beauty Rewards program by enhancing rewards and other exclusive benefits programs.

Cosmo Prof customers will benefit from special savings when they use their card and additional purchasing power that supports the salon business. In fact, Alliance Data will provide its exclusive Frictionless Mobile Credit technology that will enable customers to apply for credit directly from their mobile devices.

Alliance Data’s market-leading, high-growth, high-ROI Card Service segment contributes significantly to the company’s total revenues. Continuous agreements with new and existing clients boost the private label card portfolio.

Shares of this Zacks Rank #4 (Sell) private label credit card processing company have lost 59.7% year to date against the industry’s rally of 8.9%. Nonetheless, we expect higher revenues, solid card services performance, strategic initiatives as well as a robust capital position to aid the company’s turnaround in the near term.

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