Nordstrom Dives Into Private Online Sales Biz

On the heels of announcing strong fourth-quarter results, Nordstrom is jumping into the online private sales business, scooping up HauteLook. In a deal that may go as high as $270 million, it will buy the three-year-old HauteLook, based in Los Angeles, which offers limited time sale events on fashion and lifestyle brands, often with discounts of between 50 and 75%.

Such sites—including Gilt, Ideeli, Rue La La and Woot—soared in popularity during the recession, as consumers scoured the net for extreme bargains and luxury retailers struggled to dump high-end inventory. The equivalent of online sample sales, these member-only sites sell small quantities of products in very compressed time periods. And while growth continues to be brisk, "I think there was an understanding that the model was interesting but that it was difficult to scale," Forrester VP/principal analyst Sucharita Mulpuru emails Marketing Daily. "The biggest challenge with this model is access to inventory--allying with a retailer gives them a bit more of an advantage than they would have had otherwise."

Last summer, Amazon acquired Woot. And in 2009, Rue La La was acquired by GSI Commerce. Saks has experimented with such sales on its own site.

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