Nordstrom's Flash Sales Revenues to Hit $180 Million This Year
The forecast was included as part of the company’s first-quarter results released today.
In February, Nordstrom agreed to acquire four-year-old HauteLook, marking the department store’s first foray into online private sales. Such sales, also called flash sales, liquidate excess inventory by offering steep discounts to members who have signed up for daily email.
Nordstrom paid $180 million in stock for the company, which is now close to HauteLook’s annual sales. If the company meets certain performance goals, the transaction size could jump to as much as $270 million over time.
For Nordstrom, the revenue stream is fairly insignificant. In the first quarter, net sales for the department store totaled $2.23 billion, an increase of 12 percent compared with the same period in 2010.
The acquisition will also hit the company’s bottom line. Charges associated with the HauteLook acquisition, including stock-based compensation, reduced earnings per share in the first quarter by four cents, and is estimated to impact full-year results by about $0.20 a share.
Gilt Groupe, which is also in the flash sales business, announced earlier this week that it had raised $138 million in capital at a reported $1 billion valuation. It previously said it expected to record $500 million in revenues for its fiscal year ending in June.