GSI Commerce, a company that powers e-commerce platforms for major brands, has acquired Retail Convergence, which operates RueLaLa.com, a private sale site and SmartBargains.com, an off-price e-commerce marketplace, in a deal valued as high as $350 million.
Launched in April 2008, RueLaLa is a members-only online sample sale that sells luxury brands at discount prices during two-day private sale events in the fashion, accessories, footwear, home, jewelry and other categories. SmartBargains.com, which launched in 1999, is a online marketplace for the sale of off-price merchandise across a wide cross-section of categories.
It’s not surprising that GSI wants to enter the online private sale space considering the growth of the other players in the same arena, such as Gilt Groupe, Vente Privee, HauteLook and Ideeli.
RueLaLa’s membership has already grown to more than 1.2 million members in 18 months and is seeing strong revenue growth. In the third quarter of 2009, RueLaLa’s net revenues increased by nearly five times from the previous year, to $28 million.
Great deals on Rue La La! See tips on how to shop the site at What’s the Ooh La La About Rue La La http://guerilla...-rue-la-la.html
Nancy Brenner
Guest Blogger, Guerillashopper
The smartbargains link links to ruelala.com…
Try beyondtherack.com
http://www.beyo...ite/NOT390A688B
hot deals , the rising private sales site
Do not order from this company! I had a horrible experience with them waiting 3 weeks for my order with no word from them. I emailed them multiple times and never heard back. I had to cancel the credit card payment and only then did I receive an email from them saying my item was out of stock. After researching online I found many others that had the same issue. Unacceptable.
Hmm limited selection and return window behind a velvet rope. It’s like bizarro-zappos. Short gsic
I’m with you tim.
short gsic.
+/- $120 million in revenue for a $350million acquisition?
Online sales have 3% operating margins avg.
How do you get $350million in value here?
The key to this business is buying a boat load of stuff at pennies on the dollar.
Try doing that over and over and over for three years.
Lousy brands over-produced in the last 18-months giving sites like this a boost in supply.
But that supply is dropping quickly and the brand values are not going to be tarnished much longer by dumping things at rock-bottom prices.
Unsustainable.
Impossible.
Interesting how private sales have taken off and create significant value.
We’ve been working on a number of projects using Magento, which provides private sales built into the platform (only eCom platform to do so natively).
Tom
You people are clueless. Deal was $180 million up front in cash and stocks, and they’re expected to do $230 million in revenues this year. They only get the additional $170 million if they hit yearly targets for three years.
Vente-Privee has been doing this for ten years, and private sales are not about schlock for pennies on the dollar. This is not Woot.
The important question is: Can they make it profitable?