Alliance Data Private-label Card Defaults Rise

DALLAS (AP) — Credit card services provider Alliance Data Systems Corp. said Friday that defaults on its private-label credit cards rose in April.

Net chargeoffs, or the amount of loans written off as unpaid, as a percentage of average managed receivables, increased to 9.7 percent from 8.9 percent in March.

The Dallas-based company said the April loss rate is consistent with its expectations for a mid-9 percent loss rate for the quarter.

Alliance Data provides private-label credit card services to a number of retailers and wholesalers, including Victoria's Secret, Ann Taylor, Eddie Bauer and Pottery Barn.

Last month, Alliance Data said its first-quarter earnings fell by 43 percent, to $27.9 million, or 45 cents a share, compared with $49.3 million, or 61 cents a share, a year earlier. The company said at the time that its private-label credit unit will continue to be hampered by the impact of higher credit losses, but that it expects credit losses to stabilize next year.

Alliance Data shares fell $1.39, or 3.4 percent, to $39 in afternoon trading.