Gilt Groupe In Talks to Be Acquired By Hudson's Bay
The retailer is reportedly up for sale at a heavily discounted price.
Gilt Groupe is in talks to be acquired by Saks Fifth Avenue parent company Hudson's Bay for $250 million, The Wall Street Journal reports. Once valued at nearly $1.1 billion during its heyday, the company has struggled to live up to the grand expectations set by venture capitalists in 2011. In an ironic twist of fate, Gilt itself is the item being discounted this time around.
Entrepreneur Kevin Ryan's flash-sale business model, which sold designer goods at deep discounts (in the same vein as sample sales), resulted in sky-rocketing success after he launched the online discount retailer in 2007. However, rising off-price competition in the digital and brick-and-mortar space, as well as an economy slowly rising from the ashes of a recession, led to a leveling off of that success. By the early teens, Gilt was drowning in a sea of other discount retailers and a market that wasn't seeking sales as desperately as it had in 2008.
In addition to discounted designer pieces, the site also collaborated with celebs on product launches, including an exclusive deal with Kim Kardashian to sell limited-edition copies of her Selfish book. Gilt also sold one-of-a-kind pieces from Empire's wardrobe, including a Marc Bouwer dress worn by Naomi Campbell on the show.
According to The Journal, Hudson's Bay is looking to merge the digital fashion retailer with Saks Off 5th, the off-price spinoff of Saks Fifth Avenue stores which the company created to keep up with competitors like Nordstrom Rack and TJ Maxx.
Despite the heavily circulated speculation, Hudson's Bay has not yet confirmed the sale, and The Journal warns that another buyer could outbid the company's $250 million offer. Only time will tell.