HBC purchasing Gilt

Last month, FashionUnited reported that Saks's parent company Hudson's Bay Company was in talks to purchase flash sales site company Gilt Groupe Inc. It seems like the talking is over, because on Thursday, January 7, WWD reported that HBC has purchased Gilt Groupe Inc. for an estimated 250 million dollars in cash. The deal is expected to close on February 1.

While Gilt Groupe's estimated value isn't what it used to be, they could still turn out to be a highly profitable venture for HBC. Gilt is expected to help HBC beef up their digital presence, particularly in the mobile category. Mobile commerce appears to be the next frontier for retail companies, so the earlier they can get a head start on the trend the better.

HBC already has plans to integrate Gilt into with their own designer offshoot Saks Off 5th. This means that Gilt customers will be allowed to return their purchases in shop at Saks Off 5th locations and Gilt shop-in-shops will be added to Saks Off 5th locations.

Gilt's original valuation in 2011 was 1 billion dollars, so the 250 million dollar price tag that HBC got it for was practically a bargain.