Hudson's Bay Company (TSE:HBC) announced its agreement to acquire Gilt Groupe for $250 million. The acquisition reflects HBC's focus on advancing its omnichannel presence while growing its off-price business through the integration of Gilt with Saks Off 5th.
Gilt, an online shopping destination offering members special access to fashion merchandise, has more than 9 million members and about 50 percent of orders come from mobile. The digital company will now benefit from alignment with the brick-and-mortar presence of Saks Off 5th.
In return, the integration will include a new return program at Saks Off 5th for Gilt merchandise and new Gilt concept shops at Saks Off 5th locations. Currently the brand only has one physical showroom in New York, Gilt by Appointment, which invites members to try on and shop apparel, shoes and accessories.
With this transaction we are further accelerating both HBC's all-channel offering and Gilt's growth,"Jerry Storch, CEO of HBC said. "We plan to continue to foster Gilt's culture of innovation, which has helped create a strong brand with a loyal and devoted millennial following. 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. We look forward to welcoming the Gilt team to HBC and to benefitting from the complementary nature of our businesses."
The transaction is estimated to contribute $500 million to HBC's sales in 2016.
-See this Hudson's Bay Company press release
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