Hudson's Bay Co. is preparing to pay $250-million (U.S.) cash to buy Gilt Groupe Holdings, Inc., a membership-based online retailer that caters to shoppers in the millennial generation.
The Toronto-based retailer says Gilt has more than nine million members and the acquisition is expected to add about $500-million to HBC's overall revenue this year.
About half of Gilt's revenue is generated by mobile shoppers.
The Gilt acquisition will complement HBC's growing digital business, which is integrated with its store-based operations under banners such as Hudson's Bay, Lord & Taylor and Saks Fifth Avenue.
Headquartered on New York City's prestigious Park Avenue, Gilt was founded by Kevin Ryan in 2007 as an invitation-only site for women's clothing and accessories. It has since expanded into products for homes, babies and children and men.
The companies see a close fit between Gilt and Saks OFF 5th, an HBC banner that's open stores in Canada this year.
"We plan to continue to foster Gilt's culture of innovation, which has helped create a strong brand with a loyal and devoted millennial following," HBC chief executive Jerry Storch said in a press release.
"Adding Gilt to our rapidly growing digital business is very exciting and we see tremendous potential to enhance our mobile and personalization strategies by leveraging Gilt's advanced capabilities."
HBC says it expects the transaction to close by Feb. 1, after getting approval from Gilt's shareholders.