Gilt.com, the New York-based fashion discount site, is in talks to be acquired for $250 million, according to the Wall Street Journal. The prospective buyer is Hudson’s Bay, which owns Saks Fifth Avenue.
An early pioneer in “flash sales,” Gilt sells heavily discounted items from high-end brands. It has been marketed as an avenue for online sample sales and showcases different items each day.
The WSJ reports that Gilt could be grouped together with the Off Fifth brand at Saks, which is a lower-priced retail outlet. It’s possible that Gilt shops would be opened up inside these brick-and-mortar stores.
While the $250 million is a hefty price tag, Gilt has raised about $300 million in financing and had a $1.1 billion valuation in 2011. This likely means that the startup’s later stage investors lost money on the deal.
Yet the price tag will not come as a surprise for people who have been watching this space. Once considered an IPO candidate, Gilt has struggled in what is a highly competitive industry with low margins.
Rival Ideeli.com sold to Groupon for $43 million last year, which was also beneath the valuation of its last funding. Nordstrom acquired competitor HauteLook in 2011 for $270 million, back when the outlook for the “flash sales” industry was viewed more favorably.
Founded in 2007, Gilt is currently run by CEO Michelle Peluso. Its founders are Alexandra Wilkis Wilson, Kevin Ryan, Alexis Maybank and Dwight Merriman.
Kevin Ryan also founded MongoDB and Business Insider, which recently sold for $450 million. Wilson is the CEO of on-demand beauty service Glamsquad.
Talks are not finalized and could still fall apart, according to the report. A Gilt spokesperson did not immediately respond for comment.