The private label credit card industry is hot. We reported on it how this 400 million card business is set for growth and action continues this year as Alliance Data’s Comenity Bank announced the latest deal with top sports retailer Academy Sports. NASDAQ reports.
- Alliance Data Systems Corp. ( ADS ) announced Tuesday its Columbus, Ohio‑based card services business has signed a new multi-year agreement to provide private label credit card services for Academy Sports + Outdoors, a growing sports, outdoor and recreation lifestyle retailer.
- The card program will feature a simple application process through Frictionless Mobile Credit by leveraging Alliance Data’s digital and mobile expertise.
- This innovative, patent-pending capability enables shoppers to apply for the Academy Sports + Outdoors Credit Card in a matter of seconds, anywhere in the store, through a text message and a few keystrokes.
Private label credit card used to be a sleepy segment of payment cards but as players such as Alliance Data, Synchrony, Citi, and Capital One mature their loyalty businesses, they appeal to broader customer segments. Wall Street is looking kindly at companies in the space as this article indicates.
- “Given ADS’ differentiated approach, it has significant growth potential without jeopardizing asset quality,” Bruce
- While the company’s mall-based specialty apparel concentration has made the market skeptical, Bruce said headwinds are fading, which should support more stable growth. The analyst projecting 15-percent EPS CAGR over the next three years driven by 12-percent card loan growth and solid
- “Credit needs to stabilize, but we think this is doable in a healthy economic backdrop as ADS optimizes its collections efforts.”
Read the Mercator report to get a full view of the market but for now, keep an eye on this segment. Private Label isn’t so private anymore.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group