Alliance Data becomes Bread, taking buy now/pay later unit's name

Alliance Data Systems, long a private-label credit card lender, said Wednesday it is changing its name to Bread Financial, assuming the identity of the buy now/pay later startup it purchased about 18 months ago.

The Columbus, Ohio-based retail credit specialist positions the rebranding as a turning point in its evolution into a “modern, tech-forward financial services company” providing a wider range of financial options, its CEO, Ralph Andretta, said in a press release.

“Bread Financial will remain laser focused on delivering the innovative, omnichannel payment, lending and saving solutions that consumers now demand at every stage along their financial journeys,” Andretta said.

The company’s rebrand underscores the extent of the BNPL industry’s explosive growth in recent years.

Bread Financial will trade under the new ticker symbol BFH beginning April 4, consolidating prior brands Alliance Data Systems, Alliance Data Card Services and Bread Payments, the company said. The names of the company’s two bank subsidiaries, Comenity Bank and Comenity Capital Bank, will remain unchanged, operating under Bread Financial Holdings Inc.

The latest move caps a string of strategic changes that began when Andretta, a former Citigroup credit card executive, took over as CEO of Alliance Data in early 2020. At that point the company — whose roots as a retail card lender stretch back nearly 40 years — was deeply invested in providing cobranded and private-label credit cards to fading mall retail chains and had been rocked by management turnover.

The picture worsened as the pandemic forced several of Alliance Data’s retail partners, like Forever 21, into bankruptcy, shrinking their operations. Others ceased operations altogether, including Pier 1 Imports, which liquidated more than 500 stores in the U.S. and Canada in 2020.

Andretta signaled a major shift in strategy in October 2020, when he led the $450 million purchase of the New York-based Bread, which was founded in 2014 and has seen rapid adoption from consumers through the Bread app, while many retailers support Bread through online shopping platforms like Shopify, Magento and BigCommerce.

Valerie Greer, another Citi credit card veteran, joined Alliance Data in 2020 as executive vice president and chief commercial officer, working to drive growth by fusing Alliance Data’s substantial base of in-store credit operations and rich troves of customer data with Bread’s digital connections to online and in-store merchants. Greer is a 2022 Most Influential Women in Payments honoree.

Last year Andretta also moved to streamline Bread Financial’s operations by spinning off LoyaltyOne, which operated loyalty programs in dozens of countries, including Air Miles in Canada and BrandLoyalty in Europe.

Analysts have been cautiously optimistic about Bread Financial’s prospects, but recent economic headwinds are creating new challenges for the company.

Wolfe Research analyst Darrin Peller last week said he’s no longer bullish on prospects for Alliance Data and other private-label card issuers, including Capital One Financial and Synchrony Financial. “We’re particularly concerned about the health of the low-end consumer amid growing inflationary pressures, including rising gasoline prices,” Peller said in a March 17 investor note.