Breaking Fashion News: Nordstrom Buys HauteLook

Yesterday during their quarterly earnings report, fashion retailer Nordstrom made the surprising announcement that they would acquire the super hot flash sale website, HauteLook. This is big news because it’s the first time a major brick and mortar retailer has purchased a company based entirely online, specializing in the uberly popular private sales.  HauteLook has more than 4 million members who love to snatch up the overstocked designer clothes and accessories at deep discounts. The market segment for flash sales has skyrocketed as the recession hit and people were looking for ways to save money like never before. Sites like RueLala and Gilt Groupe are other examples of popular private sale sites like HauteLook, and there are many more.

Nordstrom will pay $180 Million in Nordstrom stock and a $90 million three year earn out, and word is the plans for this acquisition have been in the works since at least November. HauteLook will continue to operate as a stand alone subsidiary of Nordstrom just the way it does now, but will certainly add to the very strong online presence that Nordstrom has built for itself in recent years. Last year Nordstrom took the major step of blending its online and store inventories which has increased their sales.

So here’s my take; I think this is a brilliant move. I’ve long been a huge fan of Nordstrom for their in-store customer service, and recently that has only been bolstered by their extensive online inventory. I’m also a big fan of flash sale sites like HauteLook at RueLala. People question whether these sites will continue to be super popular when our economy bounces back… I think there’s no question. The way I see it, people have had to learn to curb their spending in the past few years and they’ve formed frugal habits that won’t likely be abandoned in the near future.