Nordstrom Acquires Flash Sales Site HauteLook for Up to $270 Million
Nordstrom has agreed to acquire four-year-old HauteLook, marking the department store’s first foray into online private sales.
Nordstrom will acquire the company for $180 million in stock. However, the transaction size could jump to as much as $270 million over time if the company meets certain performance goals and vesting requirements for the existing management team.
At that price, the transaction gives a lot of weight to a burgeoning new area of e-commerce, fueled by private/flash sales and other group-buying trends.
Los Angeles-based HauteLook offers discounts of 50 to 75 percent off home, beauty, travel and local services for women, men and kids. In the last two years, HauteLook says it has conducted 2,500 private sales events for 1,000 high-profile brands.
Seattle-based Nordstrom said HauteLook will operate as an independent, wholly owned subsidiary, to be managed by its current leadership. The HauteLook brand and Web site will remain separate from Nordstrom, and there are plenty of incentives to keep the management team in place.
While Nordstrom is primarily a physical department store, it has a fairly sizable online presence and recently has spent time integrating its online and store presence, so customers can see what inventory is online and what’s available in the store.
The transaction is expected to close in the first quarter of 2011 and is subject to customary closing conditions, including regulatory and HauteLook shareholder approval.