Nordstrom acquires HauteLook; Q4 multichannel sales up 7.2%
Nordstrom has agreed to acquire flash sales site HauteLook for $270 million, the retailer said February 17 on its fiscal fourth quarter of 2010 earnings call. The company also said its multichannel sales increased by 7.2% year-over-year in the fourth quarter of 2010.
HauteLook will operate as an independent, wholly-owned subsidiary, and will be managed by its current leadership team. It will also continue to use the HauteLook brand.
The deal will enable Nordstrom to use HauteLook's members-only 48-hour sale events. HauteLook offers discounts of 50% to 75% to its more than 4 million members. The deal is expected to close this quarter.
“The online channel is an important aspect of [our] growth strategy,” said CEO Blake Nordstrom, on the earnings call. “HauteLook will help us to develop new capabilities and contribute to this growth.”
Nordstrom will acquire HauteLook for $180 million in stock with a portion subject to ongoing vesting requirements, the company said. The transaction also includes a three-year earn-out of up to $90 million in Nordstrom stock, subject to company performance and vesting requirements for the existing management team. Nordstrom also said the transaction structure will provide significant incentive and retention mechanisms for HauteLook senior management.
Nordstrom's overall revenue increased 12.4% to $9.7 billion in fiscal full-year 2010. Revenue for Q4 2010 also increased to $2.9 billion, a 9.9% jump compared with Q4 2009.
“We exceeded our plans in 2010,” said Nordstrom. “Going forward, we want to be a customer-driven organization, focused on service, merchandise and multichannel. We're re-evaluating our connection to customers to be faster and more nimble while enhancing capabilities.”
Nordstrom saw full fiscal year net earnings of $613 million, a 39% increase compared with fiscal 2009's net earnings. For the fourth quarter, which ended January 29, Nordstrom generated net earnings of $232 million, an increase of 35% compared with fiscal 2009's Q4.
Nordstrom Rack's Q4 net sales increased by 24.1% compared with the same period of fiscal 2009.