PARIS, France — Galeries Lafayette has become the latest retailer to invest in a private sales site. The French department store has acquired e-commerce site BazarChic for an undisclosed sum in a bid to boost its omnichannel offering.
“We want to meet all our clients' expectations and needs,” said Nicolas Houzé, the chief executive of Galeries Lafayette. “We want to be present on every channel of the retail chain and meet the overall evolution of [customer] consumption. With BazarChic, we are ticking a new box with an outlet offer online.”
BazarChic, which specialises in flash sales, has grown over the past 10 years to become an e-commerce specialist in France and boasts 6.4 million members.
The acquisition makes Galeries Lafayette the latest in a string of department stores to invest in a private sales site. Earlier this year Hudson's Bay — the owner of Saks Fifth Avenue — acquired flash sale site Gilt Groupe for $250 million in cash. In 2011, department store chain Nordstrom acquired flash sales site Hautelook for $180 million in stock.
It follows consolidation in the sector after upscale homeware flash sales site One Kings Lane was acquired by Bed Bath and Beyond in June, Zulily was purchased by shopping channel QVC last year and Rue La La and Smart Bargains were snapped by GSI Commerce back in 2009. Two years later, eBay acquired GSI Commerce for $2.4 billion.
In a separate announcement, French e-commerce site Vente-Privée also announced on Monday that it has bought a majority stake in Danish e-commerce web site Designers & Friends for an undisclosed sum, as part of its ongoing acquisition strategy. In the past year alone, Vente-Privée acquired some of its European competitors in Belgium and Spain like Vente-Exclusive.com and Privalia.
Galeries Lafayette’s acquisition of BazarChic may enable it to offload stock from its physical department stores and build loyalty among a younger consumer segment, said Izaskun Bengoechea, research manager at Euromonitor, noting the increased competition department stores face from fashion brands building up their own lifestyle concepts and flagship stores in recent years.
Private sales sites allow department stores to offer discounted items to customers in a more exclusive online environment. “We strongly believe that the right model for us will be the convergence between physical and digital,” said Houzé, adding that BazarChic would help complement the strategy for its outlet stores in France. Earlier this year, Galeries Lafayette acquired Instantluxe, a private sales site that sells luxury leather goods, jewellery and accessories to its members.
"It is not a bad idea to source digital capabilities through mergers and acquisitions and cross fertilise your core business. Richemont did that with Net-a-Porter successfully,” said Luca Solca, head of luxury goods at Exane BNP Paribas.
Galeries Lafayette said it acquired BazarChic from its shareholders, which include its founders Liberty Verny and Nathalie Gillier. The sale also includes BazarChic’s subsidiaries, BazarChicVoyages (MyTravelChic) and NGR. Verny, who is currently chief executive of BazarChic, will remain at the head of the company.
“We look forward to integrating the Galeries Lafayette Group, as this move marks a new strategic step for BazarChic and MyTravelChic,” said Verny. “We are confident that our digital expertise, supported by Galeries Lafayette Group’s global outreach, will enable BazarChic to accelerate its growth in a dynamic market.”