August 14, 2009 (FinancialWire) — Apparel retailer Charming Shoppes, Inc. (NASDAQ: CHRS) has agreed to sell its credit card receivables program to Alliance Data Systems Corp. (NYSE: ADS). The retailer said it expects to receive net cash proceeds of around $110 million related to the transaction.

The transaction consists of the sale of Charming Shoppes’ private label credit card portfolio, along with certain other assets and liabilities that are required to support the card programs, including Charming Shoppes’ consolidated balance sheet asset investment in asset-backed securities.”

Charming estimated that gross proceeds from the transaction will reach $140 million. Around $30 million will be utilized to fund the termination of contractual obligations related to the transaction and exit costs.

Charming Shoppes and Alliance Data have also entered into a ten-year operating agreement for the servicing of Charming Shoppes’ private label credit card receivables program.

The retailer said it expects the transaction to close before the end of the year, subject to attaining certain customary regulatory approvals.

Under the terms of the operating agreement, Alliance Data will assume operation of Charming Shoppes’ private label credit card programs. This includes the operation of the Lane Bryant, Fashion Bug and Catherines credit card programs, which combined represent around 4.5 million active accounts generating around $680 million of annual credit sales, or 32% of the company’s retail stores nets sales for the trailing 12 months.

Bensalem, Pennsylvania-based Charming Shoppes is a specialty apparel retailer primarily focused on plus-size women’s apparel and the parent company of the Lane Bryant, Fashion Bug, Catherines Plus Sizes and Petite Sophisticate Outlet brands.

At August 1, Charming Shoppes operated 2,258 retail stores in 48 states.

Dallas-based Alliance Data is a provider of loyalty and marketing solutions, and is the parent company of Epsilon, a provider of multi-channel, data-driven technologies and marketing services, and LoyaltyOne, which owns and operates the Air Miles reward program.

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