Texas: Loyalty Ventures Inc., an operator of consumer rewards programs, filed for bankruptcy after facing a liquidity crunch and loss of customers.
The company filed for Chapter 11 protection in Houston, Texas, court papers show. The bankruptcy filing allows Loyalty to keep operating while it works on a plan to repay creditors.
In addition to dwindling liquidity, Loyalty’s revenue has come under pressure because of operational challenges and macroeconomic turbulence. Its total revenue for the third quarter that ended September 30 dropped by 4 per cent year-over-year to $162 million, according to regulatory filings. A measure of earnings collapsed by 30 per cent to $33 million.
Loyalty, which owns and operates Canada’s Air Miles rewards program, was spun off from Alliance Data Systems into a publicly listed company in November 2021. Earlier in March, Loyalty said it plans to sell its Dutch-based BrandLoyalty business to Opportunity Partners BV for $6 million.
