News Releases
Blair Corporation and Alliance Data Systems Announce New Private Label Credit Agreement
Program to help $500 Million Catalog and Web Retailer Improve Incremental
Sales and Customer Loyalty
Agreement to Include Acquisition of Blair credit portfolio
WARREN, Pa. and DALLAS, April 27 /PRNewswire-FirstCall/ -- Blair
Corporation (Amex: BL) and Alliance Data Systems Corp. (NYSE: ADS) announced
today that they have reached a definitive purchase and sale agreement whereby
Alliance's industrial bank subsidiary will purchase Blair's private label
credit portfolio and will, under a 10-year agreement, provide a fully
integrated private label credit program for Blair's catalog and Web brands
including Blair and Irvine Park.
With sales of approximately $500 million, Blair is ranked among the
nation's top 10 apparel catalog retailers and has been in business nearly 100
years. Through its Blair and Irvine Park brands, the multi-channel retailer
sells quality men's and women's business and casual fashion attire, and home
accessories, while focusing on delivering high value and superior customer
service to its customers.
Under terms of the purchase and sale agreement, Alliance's industrial bank
subsidiary will acquire Blair's private label credit portfolio, which
currently consists of over 800,000 statemented accounts each month and
generates in excess of $200 million in annual credit sales. Total
consideration will be based upon a price equal to the balance of the consumer
credit portfolio plus a premium. As of March 31, 2005, Blair's consumer
receivables balance was $166.3 million. Total consideration will be
approximately $176.3 million. The transaction has been approved by both
companies and is expected to close during the fourth quarter of 2005, subject
to regulatory review and approval, and customary closing conditions.
Also under terms of the agreement, Alliance will provide services
including account acquisition and activation, receivables funding, account
authorization, statement generation, marketing services, remittance processing
and customer service functions.
"We are pleased to announce this agreement with Alliance Data Systems
today," said John E. Zawacki, president and chief executive officer of Blair.
"It will provide Blair customers with expanded financing options supported by
consistent, customer-friendly account servicing. Our commitment to provide
updated fashion apparel and home furnishing choices at Blair, combined with
excellence in customer service, is further strengthened by this partnership.
We are particularly excited by Alliance's marketing expertise, which will
further enhance our ability to better serve our core customers. We are proud
to be associated with Alliance and look forward to many years of mutually
beneficial operations."
"We are very pleased that Blair selected Alliance to provide its private
label credit solution," said Ivan Szeftel, president, Retail Services,
Alliance Data Systems. "For nearly 100 years, Blair has stayed true to
offering its customers high-quality apparel and customer service. Our
integrated credit and marketing capabilities nicely complement Blair's
commitment to its customers; specifically, our unique customized
communications and marketing tools will recognize and reward customers for
their purchases, thereby improving repeat business and use of the private
label program while strengthening Blair's relationship with its customers.
Through our private label credit services, we look forward to helping
facilitate Blair's continued success as it grows its catalog and Web
business."
During the year ended December 31, 2004, Blair's credit portfolio
generated income before income taxes of approximately $5.6 million. After
closing, Blair anticipates that the annual impact of the transaction to its
income before income taxes will be a net reduction in pre-tax income of $2 to
$4 million, as financial benefits from the Alliance partnership will partially
offset the income generated from the divested credit portfolio.
Blair currently intends to distribute the net proceeds from the
transaction (after transaction costs and required debt repayment, including a
reserve for applicable taxes related to the gain on sale), anticipated to be
approximately 80 percent of gross proceeds, to Blair's shareholders in the
form of a stock repurchase, dividend, or combination of both. The transaction
will be accretive to Blair's 2005 earnings per share.
Stephens Inc. served as financial advisor to Blair Corporation.
About Blair
Headquartered in Warren, Pennsylvania, Blair Corporation sells a broad
range of women's and men's apparel and home products through direct mail
marketing and its Web sites http://www.blair.com and
http://www.irvinepark.com . Blair Corporation employs over 2,000 associates
(worldwide) and operates facilities and retail outlets in Northwestern
Pennsylvania as well as a catalog outlet in Wilmington, Delaware. The
company, which has annual sales of approximately $500 million, is publicly
traded on the American Stock Exchange (Amex: BL). For additional information,
please visit http://www.blair.com .
About Alliance Data Systems
Alliance Data Systems (NYSE: ADS) is a leading provider of transaction
services, credit services and marketing services, managing over 105 million
consumer relationships for some of North America's most recognizable
companies. Alliance creates and manages customized solutions that change
consumer behavior and that enable its clients to build stronger, mutually
beneficial relationships with their customers. Headquartered in Dallas,
Alliance Data Systems employs approximately 7,500 associates at 35 locations
in the United States and Canada. For more information about the company, visit
its web site, http://www.AllianceDataSystems.com .
Blair Forward Looking Information
The foregoing contains certain "forward-looking statements" within the
definition of federal securities laws. Statements made in this release
regarding the company's definitive agreement and intention to sell
substantially all of its and its affiliates' credit portfolio, to enter into a
long term marketing and servicing alliance, expectations and intentions
regarding use of such sale proceeds, expectations regarding the accretive
nature of the transaction and subsequent resulting income generation are
forward-looking statements. The company cautions that forward-looking
statements, as such term is defined in the Private Securities Litigation
Reform Act of 1995, contained in this report are based on estimates,
projections, beliefs and assumptions of management at the time of such
statements and are not guarantees of future performance. The company
disclaims any obligation to update or revise any forward-looking statements
based on the occurrence of future events, the receipt of new information, or
otherwise. Forward-looking statements of the company involve risks and
uncertainties and are subject to change based on various important factors.
Actual future performance, outcomes and results may differ materially from
those expressed in forward-looking statements made by the company and its
management as a result of a number of risks, uncertainties and assumptions.
Representative examples of those factors (without limitation) include the
company's success in gaining regulatory review and approval of the
transaction; general retail industry conditions and macro-economic conditions;
economic and weather conditions for regions in which the company's stores are
located and the effect of these factors on the buying patterns of the
company's customers; the impact of competitive pressures in the department
store industry and other retail channels including specialty, off-price,
discount, internet, and mail-order retailers; potential disruption from
terrorist activity; world conflict and the possible impact on consumer
spending patterns and other economic and demographic changes of similar or
dissimilar nature.
Alliance Data Systems' Safe Harbor Statement/Forward Looking Statements
This release may contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements may use words
such as "anticipate," "believe," "estimate," "expect," "intend," "predict,"
"project" and similar expressions as they relate to us or our management. When
we make forward-looking statements, we are basing them on our management's
beliefs and assumptions, using information currently available to us. Although
we believe that the expectations reflected in the forward-looking statements
are reasonable, these forward-looking statements are subject to risks,
uncertainties and assumptions, including those discussed in our filings with
the Securities and Exchange Commission.
If one or more of these or other risks or uncertainties materialize, or if
our underlying assumptions prove to be incorrect, actual results may vary
materially from what we projected. Any forward-looking statements contained in
this news release reflect our current views with respect to future events and
are subject to these and other risks, uncertainties and assumptions relating
to our operations, results of operations, growth strategy and liquidity. We
have no intention, and disclaim any obligation, to update or revise any
forward-looking statements, whether as a result of new information, future
results or otherwise.
SOURCE Alliance Data Systems Corp.; Blair Corporation
CONTACT:
Ed Heffernan, CFO
972-348-5191
Shelley Whiddon, Media
972-348-4310
both of Alliance Data Systems
Bryan Flanagan
SVP/Chief Financial Officer
Thomas McKeever
SVP/Operations & Administration
both of Blair Corporation
814-723-3600