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Rue La La Buys Gilt, Long Live Flash Sale Sites

Rue la la

Rue la laRue La La is acquiring rival Gilt Groupe, though the terms of the sale aren’t known. Once the darlings of ecommerce, flash sale sites have become passé, though Rue La La owner Michael Rubin insists it’s a model that’s alive and well.

“People who say the flash sale model is dead don’t realize how much business is being transacted in this space by consumers – it’s tens of billions of dollars a year,” he told the Wall Street Journal.

Sources told the New York Post that Rue La La’s parent company Kynetic will pay “considerably less than the $250 million HBC paid for it in 2016.”

The Post said Gilt was not the only flash-sale site to shrink over the years. “Fab.com was also valued at $1 billion but was sold in 2014 for $15 million. Zulily, after going public in 2014, was sold to QVC, and Ideeli was sold to Groupon for $43 million.”

The Journal said Rue La La and Gilt Groupe do a combined $1 billion in annual sales with 20 million customers. “Gilt targets more upscale, urban shoppers, while Rue La La has a wider, more mass appeal,” it wrote. The

The AP (via the Washington Post) said the new company would be called Rue Gilt Groupe and the companies’ distribution centers merged, though the sites will be operated independently. “Rubin also said he believes the combined company will do an even better job in personalizing offers to shoppers.”

At one point, eBay owned Rue La La when it bought GSI Commerce in 2011, but it sold Rue La La and retained a minority interest as part of the deal.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

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