Credit Card Issuer Purchases Charming Shoppes Portfolio

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Regular shoppers of Fashion Bug, Catherine's, and Lane Bryant stores may soon notice a new return address on their credit card statements. Alliance Data Systems purchased the credit portfolio of Charming Shoppes, the retailers' parent company, for $110 million. 4.5 million customers will be affected by the deal, but experts note that few of those cardholders will notice any significant difference.

Alliance Data Systems formed over a decade ago when venture capital investors merged the retail credit card operations of JCPenney and The Limited. Since then, the company has made strategic acquisitions of retail credit portfolios and private label credit card issuers. Although customers don't know Alliance Data by name, investors have praised the company for its management of in-store, online, and catalog credit card offerings.

The deal underscores retailers' need to reduce risk and preserve capital in a challenging economy. Like other companies that have sold their portfolios to Alliance Data, Charming Shoppes will gain a cash infusion critical to maintaining their current retail footprint.

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