Oh, how the mighty have fallen.
Luxury flash-sale e-tailer Gilt Groupe, which sells designer goods at deep discounts for a limited time and was valued at $1.1 billion in May 2011, is reportedly close to selling itself to Hudson’s Bay Company for about $250 million.
People familiar with the matter told The Wall Street Journal that a deal could be announced early next year, but that Gilt is also in talks with other potential suitors.
Hudson’s Bay, which operates its namesake chain of department stores as well as Lord & Taylor, Saks Fifth Avenue and Galeria Kaufhof, would combine the New York-based website with its Saks Off 5th chain of off-price stores.
It’s been a bumpy road for Gilt of late. In October, the 8-year-old company cut 45 jobs, including those of Clay Cowan, chief marketing officer, and its head of international business, Marshall Porter. Last February, it raised $50 million in fresh funding, signaling that a much-speculated public offering was still a ways off.
WSJ said the low price being discussed reflects a declining business, noting that Gilt had third-quarter sales of around $125 million—down 10 percent from the year-ago period—and an operating loss of $11 million.
Gilt isn’t the only once-hot flash-sale site struggling to survive. Furniture and lifestyle e-tailer One Kings Lane, previously valued at more than $900 million, laid off 25 percent of its employees on Monday after sales growth slowed.
Similarly, Zulily’s shares plummeted 66 percent earlier this year when many investors started to question the site’s sustainability. It was acquired by QVC’s parent company, Liberty Interactive Corp., last summer for $2.4 billion in cash and stock.