Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
In a deal worth $180 million, the retail chain enters the hot private-sale space.
Nordstrom Inc. today said it would buy HauteLook, which offers online private sales of fashion and lifestyle products. Nordstrom says it will buy the company for $180 million in stock plus additional incentives if the flash sale site meets certain goals.
Nordstrom is No. 29 in the Internet Retailer Top 500 Guide. HauteLook is No. 191. Nordstrom says the acquisition enables it to compete in the fast-growing private sale marketplace and to better serve consumers through multiple channels. HauteLook sales typically last for 48 hours, with consumers able to snag discounts of 50% to 75% on apparel, beauty products, home items and travel. The company launched in 2007.
“We are excited to partner with HauteLook as we believe this acquisition further enhances our focus on serving customers online in new and compelling ways,” says Blake Nordstrom, Nordstrom president. “While our focus on providing a superior in-store shopping experience is our roots, continuing to find ways to use technology to serve customers the way they want to be served is critical. This partnership gives Nordstrom and HauteLook shared growth opportunities as online shopping evolves.”
Nordstrom says HauteLook will operate as an independent, wholly owned subsidiary under the supervision of its current management. HauteLook will retain its brand and web site.
“By joining forces with Nordstrom, we are giving customers a fuller range of options for the way they shop today,” says HauteLook CEO Adam Bernhard . “Our established membership base of well over four million shoppers is closely aligned with the Nordstrom customer. We feel fortunate to partner with a company that shares our commitment to providing customers with great brands and an exciting shopping experience.”
Nordstrom expects to close the deal by April. In addition to the $180 million in Nordstrom stock, the HauteLook management can earn up to an additional $90 million in stock over a three-year period by meeting certain performance goals, Nordstrom says.
More flash sale sites could be acquisition targets, says Bernardine Wu, CEO of e-commerce consulting firm FitForCommerce. The smaller players, including ideeli, Beyond the Rack and Mint, are more likely acquisition targets than larger ones like Gilt Groupe, because they would command a lower price, says Bernardine Wu, CEO of e-commerce consulting firm FitForCommerce.
“Gilt is the largest and has been the most successful in branching out to verticals (travel, jewelry, men, women, home, etc) and in building a brand and content that supports those luxury verticals,” Wu says. “They’ve created ‘lifestyle’ sites like Gilt MANual and discount coupon GiltCity sites to compete with Groupon. Not to mention, they are likely to eclipse $1 billion this year and are considering an IPO.” None of the private sale retailers Wu mentions are FitForCommerce clients.