Rue La La is buying Gilt Groupe from Hudson’s Bay Company, in the second acquisition of Gilt Groupe in two years.
Founded in 2007, Gilt Groupe was once valued at $1 billion, but the flash-sales frenzy failed to take off the way investors expected. Hudson’s Bay Company purchased Gilt Groupe in 2016 for $250 million. Rue La La itself was acquired in 2011 by Kynetic, a holding company that owns other e-commerce entities, according to Fast Company.
The brands will remain separate due to their different customer bases, but after the acquisition the company will be known as the Rue Gilt Groupe. The deal brings together “two complementary lifestyle brands into a multi-brand growth platform,” and will see the new Rue Gilt Groupe aim to “capitalize on Rue La La’s mobile-first approach,” according to a press release. The online flash-sale websites will now reach 20 million members combined.
“As part of the actions taken to strengthen the foundation of the Company and position HBC for profitable growth, we have made the decision to divest Gilt,” Hudson’s Bay said in a statement to Coins2Day. “We are pleased to have found homes for the Gilt businesses in the U.S. And Japan that are more synergistic with Gilt’s core operating model. These transactions will allow us to focus time and resources on growth drivers that will have the greatest impact on our results.”
Rue La La plans to hire 150 employees to run the Gilt business following the close of the deal, which is expected at the end of July.
Michael Rubin, the executive chairman of Rue La La, said in the press release the company expects to “surpass $1 billion in total sales.”
