Once valued at around $1 billion, eCommerce startup Gilt has found its exit, a $250 million acquisition by Saks’ parent company, Hudson’s Bay Co. (HBC).
Once on fire with growth based on its business model of limited-time offer sales of designer clothes, accessories and home goods, Gilt has seen its explosive growth level off some and plans for an IPO shelved in a less than wholly receptive market.
Flash sales, though once commerce’s “next big thing,” have had a hard time performing consistently. Zulily saw its shares take a 60 percent haircut following its IPO before finally selling off to the parent of home shopping channel QVC for $2.4 billion.
So, what will Gilt as part of Saks look like?
Hudson’s Bay will combine Gilt and Saks Off 5th, the retailer’s discount brand. More interestingly, Gilt is making the migration from online-only to offline, with Gilt-branded stores operating within Saks Off 5th locations. Gilt’s management team will likely travel to Hudson’s Bay as part of the acquisition deal.
HBC acquired Saks about three years ago as part of a push to build out the firm’s eCommerce offerings. As of last year, Saks was the engine behind 72 percent of HBC’s eCommerce sales overall, but online sales for the retail conglomerate, on the whole, are thought to likely be pretty small. Gilt might be able to boost that.
Still, the acquisition is eye-catching, as it appears Gilt is the next once-unicorn to falter and exit with a value far south of the billion dollar mark.