E-Commerce Firm Rue La La Buys Fellow Flash-Sales Site Gilt Groupe

Xconomy Boston — 

Two of fashion tech’s pioneering companies have come together.

Rue La La, a flash-sale fashion site, announced Monday that it has purchased Gilt Groupe, a discount fashion and merchandise seller. Terms of the deal were not disclosed, but the two brands will operate independently, according to a press release. The merged company will be called Rue Gilt Groupe.

“Our two distinct brands have large, highly engaged customer bases, cutting edge technology and mobile leadership,” Michael Rubin, executive chairman at Rue La La, said in a prepared statement.

Boston-based Rue La La is buying Gilt from Hudson Bay Co., which purchased the New York-based e-retailer for $250 million in 2016. At the time, Hudson Bay—which owns Saks Fifth Avenue, Lord & Taylor, and other retail brands—said Gilt would boost the company’s digital and mobile commerce businesses.

Both companies have seen ups and downs since the rise of the flash-sales sector, which began during the recession that started in 2008. There were layoffs and high-profile senior management turnover at both firms; Gilt had to lay off nearly 100 workers in 2012, and a long-rumored IPO never materialized.

But on Monday, Mark McWeeny, Rue La La’s CEO, said the company has achieved record revenues and profits in 2017. “Rue La La is poised to further strengthen its leadership position in fashion off-price e-commerce,” he said in the press release. “Through the acquisition of Gilt and our evolution into a multi-brand platform, we are equipped for an acceleration in growth, innovation and profitability.”

Rue La La has an interesting history. It was part of a parent company called Retail Convergence, which was purchased by publicly traded GSI Commerce in 2009 for $180 million in cash and stock upfront. In 2011, eBay bought GSI Commerce, but spun out Rue La La as a separate, private company.