Hudson's Bay announces Gilt Groupe acquisition for $250M
- On Thursday, Hudson's Bay Co. announced the acquisition of Gilt Groupe Holdings Inc. for $250 million in cash.
- Hudson's Bay, owner of Saks Fifth Avenue and Lord & Taylor, among other brands, plans to incorporate the flash-sale site into its off-price Saks Off 5th division.
- The planned acquisition was first reported in December last year. The deal is expected to close Feb. 1, pending Gilt shareholder approval and other customary closing conditions.
Once the shining star of flash sales and valued at $1.1 billion, Gilt's acquisition at $250 million underscores the troubles that flash sales sites face. Hudson's Bay's deal with Gilt Groupe mirrors Nordstrom's acquisition of HauteLook and QVC's acquisition of Zulily, two other flash-sale sites. As the economic picture improves, consumers are losing interest in flash sales and luxury inventory is becoming less available, while other off-price competitors like T.J. Maxx are growing.
The acquisition could help Hudson's Bay revamp its Saks Off Fifth stores, with plans to feature Gilt "concept" stores in its physical stores and capitalize on Gilt's digital savvy, which includes 9 million members and a strong millennial following. Gilt customers will be able to return merchandise at Saks Off Fifth locations, bringing in foot traffic for the brick-and-mortar and easing customers' anxiety of buying online for Gilt. The companies said that the deal will help them reduce shipping costs and increase purchasing power.
Gilt has a strong mobile base, with about half of its orders coming in through its mobile platform. If Husdon's Bay is able to capture some of these mobile capabilities and bring them to the rest of its brands, it will help at a time when department stores are desperately trying to revamp their e-commerce operations to stay competitive.
“We plan to continue to foster Gilt’s culture of innovation, which has helped create a strong brand with a loyal and devoted millennial following,” Jerry Storch, CEO of Hudson’s Bay, said in a statement announcing the deal. “Adding Gilt to our rapidly growing digital business is very exciting and we see tremendous potential to enhance our mobile and personalization strategies by leveraging Gilt’s advanced capabilities.”
- Press Release Hudson’s Bay Company to Acquire Gilt
- New York Times Saks Owner Clinches Deal for Gilt Groupe
- Re/Code Hudson’s Bay Confirms $250 Million Acquisition of Gilt Groupe