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Bread Financial

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Bread Financial Holdings, Inc.
FormerlyAlliance Data Systems Corporation (1996–2022)
Company typePublic
Industryfinancial services
FoundedApril 22, 1983; 41 years ago (1983-04-22)
Headquarters
Columbus, Ohio
,
U.S.
Area served
  • United States
Key people
Ralph Andretta (president & CEO)
ProductsCredit cards
RevenueDecrease US$4.521 billion (2020)
Decrease US$888.4 million (2020)
Decrease US$213.7 million (2020)
Total assetsDecrease US$22.547 billion (2020)
Total equityDecrease US$1.521 billion (2020)
Number of employees
~8,000 worldwide (2023)
Subsidiaries
  • Comenity Bank
  • Comenity Capital Bank
Websitebreadfinancial.com
Footnotes / references
[1]

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

A signficant portion of Bread Financial's revenue is generated through late fees charged to the subprime consumers it primarily serves.[2] In October 2024 the Wall Street Journal reported that Bread Financial would raise its soft interest rate of 29.99% and add additional fees to customer accounts in anticipation of a Consumer Financial Protection Bureau ruling that would reduce its $41.00 late payment fee to $8.00.[3] [4]

History

[edit]
Former headquarters in Plano, TX

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.[5]

In August 1998, Alliance Data acquired LoyaltyOne, then-branded The Loyalty Group Canada, for $250 million.[6] The deal gave Alliance Data two business enhancements, Canada's Air Miles Rewards Program and the company behind the Air Miles program, LoyaltyOne.[7]

In 2001, Alliance Data went public.[8]

In May 2007, The Blackstone Group, a private equity firm, announced plans to acquire Alliance Data.[9][10] In April 2008, Alliance Data terminated the merger agreement with Blackstone Affiliates.[11][12]

Ed Heffernan was promoted to president and CEO of Alliance Data in February 2009, after being with the company since 1998.[13][14][15] In 2019 he 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.[16]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.[17]

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.[18] In March 2022, Alliance Data rebranded as Bread Financial.[18][19]

Former businesses

[edit]

Alliance Data Card Services

[edit]

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[20] 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.[21]

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.[22]

LoyaltyOne

[edit]

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

Five businesses make up the LoyaltyOne: Air Miles national reward program, in which approximately two-thirds of Canadian households participate;[23] Colloquy; LoyaltyOne Consulting; Precima; and Squareknot.

Epsilon (aka Epsilon Data Management)

[edit]

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. It sends billions of permission-based emails every year.[24] Acquired by Epsilon in 2011,[25] Aspen Marketing Services is a marketing services agency headquartered in Chicago, Illinois.[26]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. [citation needed]

In late February 2013, Facebook announced partnerships with four companies, including Epsilon, to help reshape its targeted advertising strategy.[27]

The company relocated its headquarters to the former Nokia regional headquarters space in Las Colinas, Texas, near Dallas.[28][29]

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.[30]

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.[31][32] 

Controversy

[edit]

In 2010 Epsilon failed to heed warnings to secure data.[33] In March 2011 it was discovered that email addresses from customers of at least 50 client companies were stolen. A phishing tactic that uses personalized emails to trick people into disclosing personal information, including passwords and financial details, it was reported that the breach was related to Epsilon itself being phished.[33] The company quickly notified the public about the breach.[34] In June 2011 company executives were called before Congress to answer questions about the security breach.[35] Interviewed for a 60 Minutes segment titled "The Data Brokers: Selling your personal information", then-CEO and chairman Bryan Kennedy called the hearings "political theater" and stated that "consumers ought to understand that the Internet is an advertising medium."[36]

Products and Technology

[edit]

In October 2020, Alliance Data launched Enhanced Digital Suite.[37]

In October 2020, Alliance Data selected Fiserv for Credit Processing Services.[38]

In 2021, Alliance Data invested $100M in digital technologies.[39]

In April 2022, Bread Financial partnered with American Express and launched the Bread Cashback American Express Credit Card.[40][41]

Company acquisitions and divestitures

[edit]
  • 1998: LoyaltyOne was acquired by Alliance Data.
  • 2002: Colloquy/Frequency Marketing was acquired by Alliance Data.[42]
  • 2004: Epsilon was acquired by Alliance Data.[43]
  • 2005: Bigfoot Interactive was acquired by Alliance Data.[44]
  • 2006: Abacus was acquired by Alliance Data's Epsilon from DoubleClick.[45]
  • 2008: Heartland Payment Systems acquired Alliance Data's Network Services business.[46]
  • 2008: Vertex acquired Alliance Data’s Utility Services business.[47]
  • 2011: Aspen Marketing Services was acquired by Alliance Data (to be a part of Epsilon).[48]
  • 2012: Alliance Data acquired the $475 million private label credit card portfolio of The Bon-Ton Stores, Inc.[49]
  • 2012: Epsilon acquires Hyper Marketing and agencies Ryan Partnership & Catapult.[50]
  • 2014: AD acquired Conversant Formerly known as ValueClick; Conversant specialized in the affiliate marketing business, which revolved around video and mobile channels.[51][52]
  • 2014: Alliance Data acquires BrandLoyalty.[53]
  • 2014: Epsilon acquires Conversant, formerly ValueClick.[54]
  • 2019: Alliance Data sells off Epsilon to Publicis for $4.4B.[55]
  • 2019: Alliance Data acquired Lon Operations Inc., a digital payments company operating under the trademark Bread.[56]
  • 2020: Alliance Data closes Bread deal in December.[57]

References

[edit]
  1. ^ "Alliance Data Systems Corporation 2020 Annual Report (Form 10-K)". sec.gov. U.S. Securities and Exchange Commission. February 26, 2021.
  2. ^ Mullen, Caitlin (December 14, 2023). "Synchrony, Bread plan offsets to late fee cap". Payments Dive. Retrieved 2024-11-11.
  3. ^ Shen, Lucinda (January 29, 2024). "CFPB credit card fee rule could hit Bread, Synchrony". Wall Street Journal. Retrieved November 4, 2024.
  4. ^ Au-Young, Angel (October 4, 2024). "Carrying a Credit-Card Balance Has Gotten Way More Expensive". Wall Street Journal. Retrieved November 4, 2024.
  5. ^ "The InfoTech 100 Companies: Alliance Data Systems Profile". Businessweek.com. 2006-05-31. Archived from the original on 27 June 2010. Retrieved 2010-07-01.
  6. ^ "The Value of Loyalty". 2008.[permanent dead link‍]
  7. ^ "U.S. database specialist buys The Loyalty Group". 1998-08-03.
  8. ^ Molinari, Elena (June 8, 2001). "Alliance Data Debuts After 18-Month Wait". Wall Street Journal.
  9. ^ Michael Flaherty; Caroline Humer (2007-05-17). "Blackstone to buy Alliance Data for $6.76 billion". Reuters. Retrieved 2010-07-01.
  10. ^ "Alliance Data To Be Acquired by The Blackstone Group". Paymentsnews.com. Archived from the original on 2011-07-15. Retrieved 2010-07-01.
  11. ^ "Alliance Data Drops Suit to Force Deal". The New York Times. 2008-02-09.
  12. ^ "Alliance Data Terminates Merger Agreement with Blackstone Affiliates". Paymentsnews.com. Archived from the original on 2011-07-15. Retrieved 2010-07-01.
  13. ^ "Forbes Profile on Ed Heffernan". Forbes.com. Archived from the original on 2011-01-29. Retrieved 2010-11-22.
  14. ^ Pearson-Hormillosa, Shashana (2010-01-10). "Alliance Data CEO Ed Heffernan taps into his M&A expertise to take big risks in a tough economy". www.bizjournals.com/dallas/. Retrieved 2010-11-22.
  15. ^ "Alliance Data promotes CFO Edward Heffernan to president, CEO; Michael Parks to continue as chairman - update". tradingmarkets.com. 2009-02-18. Retrieved 2010-11-22.[permanent dead link‍]
  16. ^ "Alliance Data Announces Organizational Changes". Yahoo Finance. Retrieved 2019-06-10.
  17. ^ Sarkar, Brinda (17 July 2019). "Alliance Data's card services business opens office in Bengaluru". The Economic Times.
  18. ^ a b Fitzgerald, Kate (March 23, 2022). "Alliance Data becomes Bread, taking buy now/pay later unit's name". American Banker.
  19. ^ "Alliance Data is now Bread Financial™". www.finance.yahoo.com. 23 March 2022. Retrieved 24 March 2022.
  20. ^ ADS. "Client News Release".
  21. ^ Pimlott, Daniel (18 May 2007). "Blackstone seals $8bn deal for credit card group ADS". Financial Times. Retrieved 6 November 2012.
  22. ^ "Comenity Bank: Private Company Information - Businessweek". Investing.businessweek.com. Archived from the original on July 9, 2011. Retrieved 2014-03-13.
  23. ^ "AIR MILES Corporate Incentives | Fast Facts". Aeis.com. Archived from the original on 2009-04-01. Retrieved 2010-07-01.
  24. ^ "More customers exposed as big data breach grows". Reuters. 2011-04-03.
  25. ^ Elliott, Stuart (25 April 2011). "Epsilon to Acquire Aspen Marketing Services". Media Decoder. The New York Times. Retrieved 8 September 2012.
  26. ^ "Aspen Marketing Services Acquires Newgen Results Corp". destinationcrm.com. 1 October 2007. Retrieved 8 September 2012.
  27. ^ "What You Didn't Post, Facebook May Still Know" 26-03-2013
  28. ^ Brown, Steve (2013-08-13). "Nokia leaving high-profile Las Colinas tower; Epsilon moving in". Dallas Morning News. Retrieved 2014-03-13.
  29. ^ "Epsilon moves into newly finished Irving headquarters". Dallas Business Journal. 5 August 2014.
  30. ^ Graham, Megan (April 14, 2019). "Publicis announces $4.4 billion deal to acquire data marketing company Epsilon". Graham Messick and Maria Gavrilovic, producers. CNBC. Retrieved 2019-04-14.
  31. ^ Erblat, Austen (2024-06-01). "Former Colorado data company executive convicted of mail and wire fraud, sold data on millions of people - CBS Colorado". www.cbsnews.com. Retrieved 2024-06-24.
  32. ^ "Civil Division | United States v. Epsilon Data Management, LLC | United States Department of Justice". www.justice.gov. 2021-01-15. Retrieved 2024-06-24.
  33. ^ a b "Epsilon Fell To Spear-Phishing Attack". Dark Reading. 4 November 2011.
  34. ^ "Firms Adjust to Hacks". Wall Street Journal. 17 June 2011.
  35. ^ Sue Reisinger. "Epsilon Data Management GC on How to Handle Data Breaches". Corporate Counsel.
  36. ^ Kroft, Steve (2014-08-24). "The Data Brokers: Selling your personal information - CBS News". www.cbsnews.com. Retrieved 2024-10-31.
  37. ^ Lucas, Peter (October 22, 2020). "Alliance Data Shifts Its In-House Private-Label Processing Operations to Fiserv". Digital Transactions.
  38. ^ Ghose, Carrie (October 28, 2021). "Alliance Data investing $100M in digital tech including buy-now-pay-later". Columbus Business Journal.
  39. ^ Ghose, Carrie (March 23, 2022). "Alliance Data renames itself for fintech acquisition". Columbus Business Journal.
  40. ^ Holzhauer, Brett (April 21, 2022). "American Express and Bread Financial announce new 2% cash-back credit card". CNBC.
  41. ^ Frankel, Robin Saks; Adams, Dia (July 6, 2022). "Bread Cashback American Express Card 2022 Review". Forbes.
  42. ^ "Alliance Data Systems Buys Frequency Marketing".
  43. ^ "Alliance Data Systems to Acquire Epsilon Data Management, Inc". Crm2day.com. Retrieved 2010-07-01.
  44. ^ "Epsilon to Snap Up Bigfoot Interactive". ClickZ. 3 October 2007. Retrieved 2014-03-13.
  45. ^ Worldwide Databases (2007-02-01). "Alliance Data'S Epsilon To Acquire Abacus". Entrepreneur.com. Retrieved 2010-07-01.
  46. ^ "Convenience Store News". Csnews.com. Retrieved 2010-07-01.[permanent dead link‍]
  47. ^ "Energy Risk - Vertex Acquires Alliance Data Utilities, an Interview with John Hall @ RiskCenter: A Financial Risk Management Media Company". Riskcenter.com. Retrieved 2010-07-01.
  48. ^ "Alliance Data's Epsilon Business to Acquire Aspen Marketing Services" (Press release). prnewswire.com. Retrieved 2012-07-18.
  49. ^ "Alliance Data to buy Bon-Ton's credit card portfolio". Reuters. 2012-06-19. Retrieved 2012-06-19.
  50. ^ "Epsilon goes omnichannel with its acquisition of Hyper Marketing". DMNews. 2012-11-09.
  51. ^ Kaye, Kate (September 16, 2014). "Epsilon CEO: Buying Conversant Will Help Connect Cross-Channel Dots". Ad Age.
  52. ^ Garland, Chad (September 11, 2014). "Alliance Data to acquire Conversant for $2.3 billion". Los Angeles Times.
  53. ^ "Alliance Data Acquires 60 Percent of BrandLoyalty". BrandLoyalty. November 6, 2013. Archived from the original on 2015-02-04. Retrieved 2015-02-04.
  54. ^ "Alliance Data to Acquire Conversant, Formerly ValueClick, for $2.3 Billion". AdvertisingAge. September 16, 2014.
  55. ^ Constable, Simon (2019-04-15). "France's Publicis Groupe to Acquire Alliance Data Systems' Epsilon for $4.4B". TheStreet. Retrieved 2019-04-21.
  56. ^ "Alliance Data Signs Definitive Agreement to Acquire Bread" (Press release). prnewswire.com. Retrieved 2020-01-14.
  57. ^ "Alliance Data (ADS) Acquires Bread to Boost Digital Offerings". Yahoo. December 7, 2020.
[edit]
  • Official website
  • Business data for Bread Financial Holdings, Inc.:
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