Hudson’s Bay newest acquisition is no flash in the pan

Discussion
Source: gilt.com
Jan 08, 2016

Hudson’s Bay Company (HBC), which owns its namesake chain along with Saks and Lord & Taylor, has reached a definitive agreement to acquire Gilt Groupe, one of the pioneers in the flash sales site business.

“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,” said Jerry Storch, HBC’s CEO. “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.”

According to a press release announcing the deal, Hudson’s Bay expects to benefit from the integration of Gilt with Saks Off 5th locations. Hudson’s Bay plans to create Gilt concept shops within Off 5th stores, giving it a presence in bricks as well as clicks. Customers who purchase items from Gilt will also be able to make returns at Off 5th locations.

Gilt, which has over nine million members, boasts of a robust mobile operation with over 50 percent of its orders generated on its mobile platform. CEO Michelle Peluso sees her company as complementary to the Hudson’s Bay and Saks Off 5th businesses.

“HBC understands our proposition and is committed to positioning our business for further success,” said Ms. Peluso in a statement. “Our members will find having a brick and mortar presence valuable and a positive addition to the Gilt experience.”

Hudson’s Bay is not the first department store chain to acquire its way into the flash sales business. Nordstrom bought Gilt rival Hautelook in 2011.

What is your reaction to Hudson’s Bay Company’s acquisition of Gilt Groupe? What will HBC need to do to unlock the potential of the Gilt business? What can it learn from Gilt to improve its other businesses?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Another bold move by what was once a "stuck in the mud" department store. As a Canadian, it’s fair to say I barely recognize HBC now ... in a good way!"
"The difference between HBC’s actions and Macy’s is that HBC are positioning themselves for future success and Macy’s and most retailers on the maturity section of the life-cycle are trying to re-capture the future with yesterday’s success."
"The challenge for them will be to keep inventory moving fast and keeping it fresh and not just what didn’t sell in stores last season. I believe that leveraging this tremendous online client base for their full-line stores will be the real win long term and not just an online outlet for Off 5th."

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6 Comments on "Hudson’s Bay newest acquisition is no flash in the pan"


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Kevin Graff
Guest
7 years 4 months ago

Another bold move by what was once a “stuck in the mud” department store. As a Canadian, it’s fair to say I barely recognize HBC now … in a good way!

The key here is the nearly 10 million fashion-loving members that Gilt has, and that Saks now has access to promote itself. Just think how long it would take, and how much money you would have to invest, to build that list yourself and you see the value right way.

HBC is chasing internet sales, and the lessons they can learn from Gilt will help them in that pursuit.

Gene Detroyer
Guest
7 years 4 months ago

The difference between HBC’s actions and Macy”s (per yesterday’s discussion) is that HBC are positioning themselves for future success and Macy’s and most retailers on the maturity section of the life-cycle are trying to re-capture the future with yesterday’s success.

Marge Laney
Guest
7 years 4 months ago

Smart. HBC instantly acquires a huge online subscription client base which puts them in a great position for growth both online and in-store. The challenge for them will be to keep inventory moving fast and keeping it fresh and not just what didn’t sell in stores last season.

I believe that leveraging this tremendous online client base for their full-line stores will be the real win long term and not just an online outlet for Off 5th.

angiretlwire dixon
Guest
angiretlwire dixon
7 years 4 months ago

I think the long-term success all depends on acquiring Gilt Groupe at a favorable price (that would not leave the company saddled with debt).

Lee Kent
Guest
7 years 4 months ago

If I didn’t know about some of the innovative moves HBC has made in-house, my first reaction would have been, “boy, they are getting in way over their heads. Not ready.” But folks, I think they are well positioned to take advantage of the acquisition.

Kudos for my 2 cents.

William Passodelis
Guest
7 years 4 months ago

WOW! GREAT MOVE! It will give HBC access to Gilt’s online presence and knowledge and knowhow, and expand its capabilities online — it is a great thing for HBC and all of its divisions. Gilt Groupe has a large online following. GO HBC! BRILLIANT!

wpDiscuz
Braintrust
"Another bold move by what was once a "stuck in the mud" department store. As a Canadian, it’s fair to say I barely recognize HBC now ... in a good way!"
"The difference between HBC’s actions and Macy’s is that HBC are positioning themselves for future success and Macy’s and most retailers on the maturity section of the life-cycle are trying to re-capture the future with yesterday’s success."
"The challenge for them will be to keep inventory moving fast and keeping it fresh and not just what didn’t sell in stores last season. I believe that leveraging this tremendous online client base for their full-line stores will be the real win long term and not just an online outlet for Off 5th."

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