The owner of Saks, Lord & Taylor and Hudsons Bay department stores will pay USD 250 million in cash for Gilt, as it looks to attract shoppers from another corner of the increasingly fragmented ecommerce market, durhamregion.com reports.
Gilt has fostered its business on a model that curates a selection of name clothes at lower than usual prices. The company drives business by signing up shoppers to a free membership and then sending them sales notifications through email and its smartphone app. The retailer says Gilt has more than nine million members and the acquisition is expected to add about USD 500 million to overall revenue at Hudsons Bay (TSX:HBC) in 2016.
Via the acquisition Gilt will be incorporated into its Saks Off 5th brand, which sells brand clothing at outlet price tags. Over half of Gilts sales are completed on mobile devices, which puts HBCs brands in a better position against Nordstrom, which bought fellow flash sale retailer HauteLook in 2011.
Gilt was founded by Kevin Ryan in 2007 as an invitation-only website for womens clothing and accessories. It has since expanded into products for homes, babies and children and men. HBC says it expects the transaction to close by 1 February 2016 after getting approval from Gilts shareholders.
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