Hudson’s Bay Co. is forging ahead in the off-price and e-commerce arenas. The company announced today that it’s acquiring luxury discount e-tailer Gilt Groupe Holdings for $250 million.
The company plans to bring the business into its Saks Fifth Avenue sister store Saks Off 5th with in-store concept shops and merchandise return in-store following the acquisition. Both stores have a similar model of offering deeply discounted luxury fashions and goods.
It’s a big move for HBC, which has invested heavily in its online and e-commerce projects for its department stores Saks Fifth Avenue and Lord & Taylor in the past few years. HBC expects Gilt to contribute about $500 million to 2016’s sales and $40 million to adjusted EBITDA by 2017.
HBC is also getting 9 million Gilt members as customers.
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“With this transaction, we are further accelerating both HBC’s all-channel offering and Gilt’s growth,” said Jerry Storch, CEO of HBC. “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.”
The deal is expected to close on Feb. 1.