Bay hopes to grow Saks with some Gilt
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Hey there, time traveller!
This article was published 08/01/2016 (3595 days ago), so information in it may no longer be current.
THE owner of Saks Fifth Avenue is joining forces with Gilt Groupe, hoping the flash-sale website will give the company an edge in its bid to satisfy shoppers’ hunger for discounts on designer goods.
Hudson’s Bay Company, which owns department stores including Saks and Lord & Taylor, will acquire the site in a US$250-million cash deal, the company said Thursday.
Hudson’s Bay expects the deal to contribute $500 million in sales for the fiscal year 2016 and help grow traffic at its Saks Off 5th locations, where it plans to allow customers to make Gilt returns and open Gilt concept shops inside the stores.
Gilt, founded in 2007, is an online fashion and home retailer that offers high-end goods at steep discounts through daily flash sales. The company has more than nine million members and is particularly popular with millennials, a coveted customer in the retail world.
“We always want to make sure we’re appealing to the incoming generation, and particularly the kind of customer that Gilt has,” Storch says. “The affluent millennial audience is the most sought-after audience in retail today.”
Hudson’s Bay’s 90 Saks Off 5th shops are among the company’s “highest growth vehicles,” CEO Jerry Storch told USA Today. Off-price shopping has proved to have lasting popularity with stores such as TJ Maxx posting consistently significant sales growth for years. Now, other major retailers are trying to nudge their way into the space. Macy’s started opening its own off-price locations called Macy’s Backstage in the fall offering designer goods at outlet prices.
Riding the momentum, Hudson’s Bay plans to open between 15 and 20 new Saks Off 5th locations every year “indefinitely,” Storch says.
Storch says his company also stands to benefit from Gilt’s expertise in curating product assortment, creating a sense of urgency with its sales and offering excellent mobile and online experiences. Roughly half of Gilt’s sales come from mobile orders.
— USA Today