eBay to Acquire brands4friends, Its Third Big Buy this Month
In an effort to rebuild its empire, in part through acquisitions and the fortification of its standing in the European market, eBay announced that it’s acquiring an German online shopping club for fashion, brands4friends, for nearly $200 million. The deal is expected to close in the first quarter of 2011, but a positive financial impact is not expected to materialize on the same year. eBay’s auction service has morphed into an established leading online marketplace in terms of fashion sales with $5.4 billion annual worth of fashion items sold.
brands4friends was founded in 2007, selling high-quality goods from celebrated brands at great discounts through daily special offers to its members . The company currently has 200 employees and 3.5 million member in Germany. It markets over 600 brands including international ones like Calvin Klein and Deisel.
“We want to give our customers the best possible fashion experience online,” said Doug McCallum, Senior Vice President for eBay in Europe. “With the acquisition of brands4friends, we will enter the online shopping club market with an established and dynamic partner who has the expertise, relationships and passion to match our own ambition. We expect many eBay customers will enjoy great deals on international fashion brands by joining the brands4friends community.”
Online shopping clubs comprises nearly 20% of online fashion sales in Europe, says an eBay research statistic. With the online fashion market growing rapidly, eBay spent the last 18 months investing on the improvement of its online shopping experience, as well as the expansion of outlets, specifically to the UK and Germany. They also added a new feature, enabling customers to buy directly from leading fashion brands, as well as offer flash sales and Daily Deals at discount.
In fact, several leading brands have created exclusive fashion collections specifically for eBay shoppers. Moreover, they launched an iPhone app that gives customers the ability to purchase fashion items directly from their mobile devices. It’s clear that eBay is appealing directly to brands with this acquisition as well. Evolving retail trends are more welcoming to direct brand interaction, and it’s benefitting everyone all around.
“eBay is the perfect partner for us,” said Sergio Dias, Chief Executive Officer of brands4friends. “We are able to bring our retail and brand competence and industry knowledge to eBay, and we can expect to benefit from eBay’s traffic and ecommerce experience to accelerate the growth of our shopping community.”
Aside from acquiring all shares of Germany’s brand4friends, eBay will also assume its brands4friends equity interest from UK’s SecretSales.com and Japan’s brand4friends.
Prior to the acquisition deal of brands4friends, eBay also acquired software firm Critical Path at an undisclosed amount, as well as Milo.com for $75 million. They’ve been getting deeper into fashion, dedicating boutique section for buyers and sellers. To have so many in succession means they’re serious about their efforts. especially for mobile and niche markets.
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