Hudson’s Bay in talks to acquire Gilt Groupe
According to multiple reports, Hudson’s Bay could close the sale of Gilt Groupe for about $250 million early next year. Word is that HBC plans to pair Gilt, which had a valuation of $1.1 billion in 2011, with its Saks Off Fifth concept, according to The Wall Street Journal, which broke the story Tuesday.
HBC plans to open Gilt shops inside Saks Off 5th stores and will keep layoffs of Gilt’s management and teams to a minimum, The Wall Street Journal reported, citing one source.
In spring 2007, entrepreneur Kevin Ryan launched Gilt with its unique concept of online flash sales for designer wares.After some success in its early days — the company was able to raise $138 million from investors in 2011 — Gilt has faced its share of struggles.
HBC has been active in M&A bidding lately, closing its purchase of Galeria Holding in late September to create HBC Europe, comprised of German mega-department store chain Galeria Kaufhof, Belgium department store Galeria Inno and Sportarena. The unit already delivered a 6.6 percent same-store sales jump during the first month of HBC’s ownership, the company said during its Q3 earnings release.
HBC’s sales advanced 34 percent in the third quarter, to $2.6 billion (CAD), or $1.9 billion, while net earnings were $1 million (CAD), or $740,000, an improvement over the year-ago quarter, when the company posted a net loss of $13 million