Gilt.com, one of the big names in flash sales, has a great brand and lots of members, although its not clear how many are actual buyers. At $250M this is a great deal for the owner of Saks, Saks off 5th, Lord & Taylor and Hudson’s Bay and here’s why;
1. The major issue hampering recent performance of flash sales sites has been a lack of inventory. The mix of luxury brands available from Saks off 5th solves this issue for Gilt.com.
2. This qualifies as what Gartner calls a “techquisition”. Rather than having to start from scratch this acquisition jump starts HBC into the flash sales market.
3. Extending eCommerce reach through Gilt.com creates yet another sales channel that helps provide HBC with digital bench strength.
4. Gilt.com gives HBC a major new way to reach millennial shoppers with reasonable price entry to the luxury market.
As long as HBC executes on a solid digital strategy that maximizes the asset of Gilt.com the investment should yield terrific returns.