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Zale Corporation (NYSE: ZLC) today announced it has signed a new, multi-year private label credit card program agreement with Alliance Data Systems Corporation (NYSE: ADS), a leading provider of loyalty and marketing solutions. Under the terms of the agreement, Alliance Data, through its Comenity Capital Bank (“CCB”) subsidiary, will provide private label credit cards to customers of Zale in the United States beginning no later than October 1, 2015, following the scheduled expiration of Zale’s current U.S. private label credit card agreement on September 30, 2015. In addition, prior to October 1, 2015, CCB has the option to participate in certain special financing programs for Zale’s customers in the United States.
Following the completion of program implementation during the first half of fiscal 2014, Zale will begin to receive benefit from Alliance Data’s extensive marketing, analytical and technical services. For each of Zale’s U.S. brands, Alliance Data will provide proven marketing and database capabilities, sophisticated analytics and a suite of omnichannel marketing tools designed to generate sales and extend brand affinity. Alliance Data will also provide a portfolio of innovative tablet and mobile marketing solutions for fine jewelry that are designed to optimize cardholder acquisition and retention. In addition, Zale will receive a commencement payment in July 2013 from CCB.
“We are very pleased to begin our partnership with Alliance Data,” said Matt Appel, chief administrative officer of Zale Corporation. “We selected Alliance Data for its extensive and highly regarded marketing tools and analytics, retail expertise, technology solutions and customer service. We will receive near-term benefits from these capabilities as well as significant economic benefits from this relationship over the life of the contract.”
The agreement has an initial term through the later of the seventh anniversary of the Alliance Data program commencement date or October 1, 2022, and automatically renews for successive two-year periods after the initial term in the absence of written notice by either party of non-renewal. If certain performance metrics are achieved within the first three years of the program, Alliance Data has the option to extend the initial term by two years.