NEW YORK — Hudson Bay has purchased the luxury deal site Gilt Group Holdings Inc. for $250 million as traditional retailers follow shoppers, and their money, online.
The Toronto retailer, which owns Lord & Taylor, Saks Fifth Avenue, as well as Saks Off 5th, will at the same time integrate the online company into some of its physical store locations. Gilt concept shops will open at Saks Off 5th, Saks Fifth Avenue’s off-price division. And Gilt shoppers will be able to return merchandise bought online at Gilt at Saks Off 5th.
Gilt has cultivated a loyal base of affluent millennials, a demographic shared with Saks Off 5th. It has more than 9 million members and about 50 percent of its orders come from mobile devices.
Storch points to the success at Gilt of personalizing offers for its customers.
“We are a huge believer of an all-channel retail model,” said Storch.“ Gilt is a very cool brand. This opens up a whole new world for Hudson Bay.”
The deal is expected to close Feb. 1. The addition of Gilt Group Holdings Inc. is expected to contribute $500 million to revenue in fiscal 2016.
A deal between Hudson Bay Co. and Gilt has been rumored since December and comes as the popularity of flash sites like Gilt fade. Yet Hudson Bay CEO Jerry Storch told The Associated Press that he believes these types of businesses can thrive in stores.
Storch said that he is using as a model Nordstrom’s acquisition in 2011 of the flash site HauteLook. Nordstrom’s discount division Nordstrom Rack learned from Haute Look’s customers following that deal.
Friends Read Free