Bread Financial Explained

Bread Financial Holdings, Inc.
Former Name:Alliance Data Systems Corporation (1996–2022)
Type:Public
Location City:Columbus, Ohio
Location Country:U.S.
Key People:Ralph Andretta (president & CEO)
Industry:financial services
Products:Credit cards
Revenue: (2020)
Operating Income: (2020)
Net Income: (2020)
Equity: (2020)
Num Employees:~8,000 worldwide (2023)
Footnotes:[1]

Bread Financial Holdings, Inc. is an American publicly-traded provider of loyalty and marketing services, such as private label credit cards, coalition loyalty programs, and direct marketing, derived from the capture and analysis of transaction-rich data.

History

Alliance Data was formed from the December 1996 merger of two entities: J.C. Penney's credit card processing unit and The Limited's credit card bank operation, named World Financial Network National Bank.[2]

In August 1998, Alliance Data acquired LoyaltyOne, then-branded The Loyalty Group Canada, for $250 million.[3] The deal gave Alliance Data two valuable business enhancements, Canada's Air Miles Rewards Program and the company behind the popular Air Miles program, LoyaltyOne.[4]

In 2001, Alliance Data went public.[5]

In May 2007, The Blackstone Group, a private equity firm, announced plans to acquire Alliance Data.[6] [7] In April 2008, Alliance Data terminated the merger agreement with Blackstone Affiliates.[8] [9]

Ed Heffernan was promoted to president and CEO of Alliance Data in February 2009, after being with the company since 1998.[10] [11] [12]

On June 7, 2019, Ed Heffernan resigned as CEO of Alliance Data and was replaced by Melisa Miller, who previously ran Alliance Data's Card Services division. This change in leadership effectively moved Alliance Data's Headquarters from Plano, Texas, to Columbus, Ohio.[13]

Melisa Miller held the role for roughly 6 months before being replaced by former CITI executive Ralph Andretta. In 2019, Alliance Data opened its first international office in Bangalore, India.[14]

In November 2021, Alliance Data completed the separation of its LoyaltyOne segment, consisting of the Canadian AIR MILES Reward Program and Netherlands-based BrandLoyalty businesses, into an independent, publicly traded company, Loyalty Ventures Inc.[15] In March 2022, Alliance Data rebranded as Bread Financial as part of an effort to streamline their business model into a tech-forward financial services company providing a wider range of financial options.[15] [16]

Former businesses

Alliance Data Card Services

Card Services is a provider of integrated credit and marketing services including private label, co-branded and commercial credit card programs. Alliance Data Card Services manages over 135[17] card programs for retail brands such as Victoria’s Secret, J.Crew, Eddie Bauer, Buckle, HSN, Pottery Barn, Pier 1 Imports, Lexus, Toyota, Williams Sonoma and Wayfair among many others.[18]

In 2011, Alliance Data, in partnership with NICE Systems, was honored with the Operational Leadership Award for its customer care centers by Ventana Research.[19]

Alliance Data Card Services maintains two banks to manage the funding and receivables for its clients' credit programs. In September 2012, the banks rebranded their names from WFNNB (World Financial Network [National] Bank) and WFCB (World Financial Capital Bank) to both operate under the Comenity name, as Comenity Bank and Comenity Capital Bank, respectively.[20]

LoyaltyOne

LoyaltyOne, located in Canada, provides loyalty marketing programs for North American brands in the retail, financial services, grocery, petroleum, travel, and hospitality industries.

Five businesses make up the LoyaltyOne: Air Miles national reward program, in which approximately two-thirds of Canadian households participate;[21] Colloquy; LoyaltyOne Consulting; Precima; and Squareknot.

Hewitt Associates named LoyaltyOne in their "2014 List of the 50 Best Employers in Canada."[22]

Epsilon (aka Epsilon Data Management)

Epsilon provides a broad range of loyalty marketing services spanning database marketing, direct mail, email marketing, web development, loyalty programs, analytics, data services, strategic consulting, and creative services, among others.

Ad Age has ranked Epsilon among the top marketing services firms and direct marketing agencies for several years, and Epsilon has the distinction as being the Top US Agency From All Disciplines and Top US CRM/Direct Marketing Agencies for 2012.[23] [24] [25] [26] It sends billions of permission-based emails every year.[27] Acquired by Epsilon in 2011,[28] Aspen Marketing Services is a marketing services agency headquartered in Chicago, Illinois,[29] with locations in the United States and Canada. In 2012, Epsilon reached an agreement to acquire the Hyper Marketing ("HMI") group of companies, the largest privately held digital marketing services agencies in the United States, for about $460 million.

In March 2011, Epsilon detected unauthorized access to its email database, resulting in the theft of email addresses of its clients' customers.[30] [31] [32]

In late February 2013, Facebook announced partnerships with four companies, including Epsilon, to help reshape its targeted advertising strategy.[33]

Because of Epsilon's growth over the past several years, the company relocated its headquarters to the former Nokia regional headquarters space in Las Colinas, Texas, near Dallas.[34] [35]

In March 2014, 60 Minutes interviewed Bryan Kennedy, chairman and CEO of Epsilon, as part of its segment, "The Data Brokers: Selling Your Personal Information".[36]

In April 2019, Publicis Groupe announced it would be acquiring Epsilon for $4.4 billion. This was the second biggest deal in the history of advertising, behind only Dentsu's $5 billion acquisition of Aegis Group in 2012.[37]

On January 27, 2021, the U.S. Department of Justice entered a Deferred Prosecution Agreement with Epsilon Data Management, which set up a $127.5 million fund to compensate victims.[38] [39]  

Controversy

In 2010 Epsilon failed to heed warnings to secure data.[40] In March 2011 it was discovered that email addresses from customers of 50 client companies were stolen.[40] The company quickly notified the public about the breach.[41] In June 2011 company executives were called before Congress to answer questions about the security breach.[42]

Products and Technology

In October 2020, Alliance Data launched Enhanced Digital Suite.[43]

In October 2020, Alliance Data selected Fiserv for Credit Processing Services.[44]

In 2021, Alliance Data invested $100M in digital technologies to expand consumer credit options beyond retail deals and cards.[45]

In April 2022, Bread Financial partnered with American Express and launched the Bread Cashback American Express Credit Card.[46] [47]

Company acquisitions and divestitures

Notes and References

  1. Web site: Alliance Data Systems Corporation 2020 Annual Report (Form 10-K) . February 26, 2021 . . sec.gov.
  2. Web site: The InfoTech 100 Companies: Alliance Data Systems Profile . Businessweek.com . 2006-05-31 . 2010-07-01. https://web.archive.org/web/20100627061717/http://www.businessweek.com/it100/2006/99.htm. 27 June 2010 . dead.
  3. Web site: The Value of Loyalty. 2008.
  4. Web site: U.S. database specialist buys The Loyalty Group. 1998-08-03.
  5. Web site: Molinari . Elena . Alliance Data Debuts After 18-Month Wait . . June 8, 2001.
  6. News: Michael Flaherty . Caroline Humer . Blackstone to buy Alliance Data for $6.76 billion . Reuters . 2007-05-17. 2010-07-01.
  7. Web site: Alliance Data To Be Acquired by The Blackstone Group . Paymentsnews.com . 2010-07-01 . https://web.archive.org/web/20110715060707/http://www.paymentsnews.com/2007/05/alliance_data_t.html . 2011-07-15 . dead .
  8. News: Alliance Data Drops Suit to Force Deal . The New York Times . 2008-02-09.
  9. Web site: Alliance Data Terminates Merger Agreement with Blackstone Affiliates . Paymentsnews.com . 2010-07-01 . https://web.archive.org/web/20110715060726/http://www.paymentsnews.com/2008/04/alliance-data-t.html . 2011-07-15 . dead .
  10. News: Forbes Profile on Ed Heffernan . Forbes.com . 2010-11-22 . https://web.archive.org/web/20110129065423/http://people.forbes.com/profile/edward-j-heffernan/3109 . 2011-01-29 . dead .
  11. News: Alliance Data CEO Ed Heffernan taps into his M&A expertise to take big risks in a tough economy . www.bizjournals.com/dallas/ . 2010-01-10 . 2010-11-22 . Shashana . Pearson-Hormillosa.
  12. Web site: Alliance Data promotes CFO Edward Heffernan to president, CEO; Michael Parks to continue as chairman - update . tradingmarkets.com . 2009-02-18 . 2010-11-22 .
  13. News: Alliance Data Announces Organizational Changes . Yahoo Finance . 2019-06-10 .
  14. News: Sarkar . Brinda . Alliance Data's card services business opens office in Bengaluru . The Economic Times. 17 July 2019 .
  15. Web site: Fitzgerald . Kate . Alliance Data becomes Bread, taking buy now/pay later unit's name . . March 23, 2022.
  16. Web site: Alliance Data is now Bread Financial™ . www.finance.yahoo.com . 23 March 2022 . 24 March 2022.
  17. News: ADS. Client News Release.
  18. News: Pimlott. Daniel. Blackstone seals $8bn deal for credit card group ADS. 6 November 2012. Financial Times. 18 May 2007.
  19. News: Ventana Research website. 2011. Announcing the Ventana Research 2011 Leadership Awards. https://web.archive.org/web/20160530031101/http://www.ventanaresearch.com/awards2011/. 2016-05-30. dead.
  20. Web site: Comenity Bank: Private Company Information - Businessweek . https://web.archive.org/web/20110709165012/http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=36704 . dead . July 9, 2011 . Investing.businessweek.com . 2014-03-13.
  21. Web site: AIR MILES Corporate Incentives | Fast Facts . Aeis.com . 2010-07-01 . https://web.archive.org/web/20090401003341/http://www.aeis.com/airmiles/fastFacts_EN.html . 2009-04-01 . dead .
  22. Web site: Hewitt 50 Best Employers . hewittassociates.com.
  23. Web site: Awards & Accolades . Epsilon . 2014-03-13.
  24. Web site: Archived copy . 2010-05-27 . https://web.archive.org/web/20110710130627/http://www.directagency.com/news/may052008.pdf . 2011-07-10 . dead .
  25. http://www.vml.com/common/Ad_Age_Top_20_Digital_Agencies_2008.pdf
  26. Web site: Advertising Age - April 26, 2010 . Adage.coverleaf.com . 2010-04-26 . 2010-07-01.
  27. News: More customers exposed as big data breach grows . . 2011-04-03.
  28. News: Elliott. Stuart. Epsilon to Acquire Aspen Marketing Services. 25 April 2011 . Media Decoder . The New York Times . 8 September 2012.
  29. Web site: Aspen Marketing Services Acquires Newgen Results Corp. . 1 October 2007. destinationcrm.com. 8 September 2012.
  30. News: Security Week . 2 April 2011 . 3 March 2012 . Massive Breach at Epsilon Compromises Customer Lists of Major Brands .
  31. News: PC World . 5 April 2011 . 3 March 2012 . Epsilon Data Breach: Expect a Surge in Spear Phishing Attacks .
  32. News: The Australian. 7 April 2011. 3 March 2012. Epsilon email security breach widens .
  33. https://www.cnbc.com/id/100590334 "What You Didn't Post, Facebook May Still Know" 26-03-2013
  34. Web site: Brown . Steve . Nokia leaving high-profile Las Colinas tower; Epsilon moving in . Dallas Morning News . 2013-08-13 . 2014-03-13.
  35. Web site: Epsilon moves into newly finished Irving headquarters . 5 August 2014 . Dallas Business Journal.
  36. News: The Data Brokers: Selling Your Personal Information . Steve . Kroft . Steve Kroft . Graham Messick and Maria Gavrilovic, producers . 2014-03-09 . . . 2014-03-14.
  37. News: Publicis announces $4.4 billion deal to acquire data marketing company Epsilon . Megan . Graham . Megan Graham . Graham Messick and Maria Gavrilovic, producers . April 14, 2019 . . 2019-04-14.
  38. Web site: Erblat . Austen . 2024-06-01 . Former Colorado data company executive convicted of mail and wire fraud, sold data on millions of people - CBS Colorado . 2024-06-24 . www.cbsnews.com . en-US.
  39. Web site: 2021-01-15 . Civil Division United States v. Epsilon Data Management, LLC United States Department of Justice . 2024-06-24 . www.justice.gov . en.
  40. Web site: Epsilon Fell To Spear-Phishing Attack. Dark Reading. 4 November 2011.
  41. News: Firms Adjust to Hacks. Wall Street Journal. 17 June 2011.
  42. Web site: Epsilon Data Management GC on How to Handle Data Breaches. Sue Reisinger. Corporate Counsel.
  43. Web site: Lucas . Peter . Alliance Data Shifts Its In-House Private-Label Processing Operations to Fiserv . Digital Transactions . October 22, 2020.
  44. Web site: Ghose . Carrie . Alliance Data investing $100M in digital tech including buy-now-pay-later . Columbus Business Journal . October 28, 2021.
  45. Web site: Ghose . Carrie . Alliance Data renames itself for fintech acquisition . Columbus Business Journal . March 23, 2022.
  46. Web site: Holzhauer . Brett . American Express and Bread Financial announce new 2% cash-back credit card . CNBC . April 21, 2022.
  47. Web site: Frankel . Robin Saks . Adams . Dia . Bread Cashback American Express Card 2022 Review . Forbes . July 6, 2022.
  48. Web site: Alliance Data Systems Buys Frequency Marketing.
  49. Web site: Alliance Data Systems to Acquire Epsilon Data Management, Inc . Crm2day.com . 2010-07-01.
  50. Web site: Epsilon to Snap Up Bigfoot Interactive . 3 October 2007 . ClickZ . 2014-03-13.
  51. Web site: Worldwide Databases . Alliance Data'S Epsilon To Acquire Abacus. . Entrepreneur.com . 2007-02-01 . 2010-07-01.
  52. Web site: Convenience Store News . Csnews.com . 2010-07-01 .
  53. Web site: Energy Risk - Vertex Acquires Alliance Data Utilities, an Interview with John Hall @ RiskCenter: A Financial Risk Management Media Company . Riskcenter.com . 2010-07-01.
  54. Alliance Data's Epsilon Business to Acquire Aspen Marketing Services . prnewswire.com . 2012-07-18.
  55. News: Alliance Data to buy Bon-Ton's credit card portfolio . Reuters . 2012-06-19. 2012-06-19.
  56. Web site: Epsilon goes omnichannel with its acquisition of Hyper Marketing . DMNews . 2012-11-09.
  57. Web site: Kaye . Kate . Epsilon CEO: Buying Conversant Will Help Connect Cross-Channel Dots . . September 16, 2014.
  58. Web site: Garland . Chad . Alliance Data to acquire Conversant for $2.3 billion . Los Angeles Times . September 11, 2014.
  59. Web site: Alliance Data Acquires 60 Percent of BrandLoyalty . BrandLoyalty . November 6, 2013 . 2015-02-04 . https://web.archive.org/web/20150204172540/http://www.brandloyalty-int.com/en-GB/press-%26-events/press-releases/id-498/alliance-data-acquires-60-percent-of-brandloyalty/ . 2015-02-04 . dead .
  60. Web site: Alliance Data to Acquire Conversant, Formerly ValueClick, for $2.3 Billion . AdvertisingAge . September 16, 2014.
  61. Web site: France's Publicis Groupe to Acquire Alliance Data Systems' Epsilon for $4.4B. Constable. Simon. 2019-04-15. TheStreet. en. 2019-04-21.
  62. Alliance Data Signs Definitive Agreement to Acquire Bread . prnewswire.com . 2020-01-14.
  63. Web site: Alliance Data (ADS) Acquires Bread to Boost Digital Offerings . Yahoo . December 7, 2020.

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