PARIS — Amazon.com’s fashion ambitions are heating up competition in online apparel sales, with two European acquisitions on Monday signaling further sector consolidation.
French department store chain Galeries Lafayette Group said it bought online private-sales site BazarChic, while French flash-sale pioneer Vente-Privée.com purchased a majority stake in Danish e-commerce site Designers & Friends as part of its ongoing expansion in Northern Europe. Neither company disclosed financial details.
With sales of 80 million euros, or $88.8 million, last year, BazarChic is much smaller than its competitor Vente-Privée, which logged a turnover of 2 billion euros, or $2.29 billion, in 2015. BazarChic has 6.4 million members, while Vente-Privée boasts 52 million worldwide.
But the acquisition gives Galeries Lafayette a foothold in the highly competitive private sales segment, providing it with an online outlet for excess inventory, even as it continues to expand its network of bricks-and-mortar outlet stores.
Daniel Lucht, global research director at London-based retail consultancy ResearchFarm, said the deals could be traced to the Amazon effect.
“There’s very much a link there,” he told WWD. “It’s all about the online reach. The whole transformation is one that they need to tackle and Amazon is just so aggressive in clothing at the moment that a lot of department store players probably have got another thing coming.”
Morgan Stanley has forecast that Amazon’s e-commerce platform will account for 19 percent of the U.S. apparel industry by 2020. That’s up from an estimated $17.9 billion, or 6.7 percent of the market, last year — putting Amazon just behind Wal-Mart.
Amazon has been ramping up in fashion for some time, sponsoring industry events, starting private-label brands and launching a live-streaming shopping show. Meanwhile, department stores have been struggling.
Galeries Lafayette said it had purchased a majority stake in BazarChic and its subsidiaries BazarChicVoyages (MyTravelChic) and NGR from shareholders including the company’s founders, Liberty Verny and Nathalie Gillier. It will acquire the remaining stake in the coming years, while Verny will stay on as chief executive officer.
The French retailer has been stepping up its online expansion as part of the Ambitions 2020 program laid out by Nicolas Houzé, the ceo of its department-store division. In June, it bought luxury goods reseller Instantluxe.com and last month, it named Constance de Polignac its new marketing and digital director, charged with accelerating its omnichannel development.
Philippe Houzé, executive chairman of Galeries Lafayette Group, said: “As our department store business is focused on its omnichannel transformation, we are delighted that BazarChic joins our group. Liberty Verny and Nathalie Gillier have founded and developed a major French player in e-commerce, and we are convinced that together we will write a new chapter of its history.”
The closing of the deal is subject to antitrust authorizations.
Meanwhile, Vente-Privée cited “an increasingly competitive market with more and more specialized offline and online players.” In the last year, it has snapped up its competitors Vente-Exclusive.com in Belgium, Privalia in Spain and Eboutic.ch in Switzerland.
“It just shows that it’s a ‘winner takes all’ sector. A lot of online at the moment seems to be going that way, actually, that you’ve got the market leader consolidating,” noted Lucht at ResearchFarm, comparing Vente-Privée to British online food order and delivery service Just Eat.
“With that sales model, it’s something where scale is really important,” the analyst added.
Jacques-Antoine Granjon, founder and ceo of Vente-Privée.com, reiterated the acquisitions form part of its long-term vision.
“We respect the work done by the founders and leaders of Designers & Friends and we are very happy to count on their support in this new European adventure, which now extends to Scandinavia,” said Granjon, who founded Vente-Privée in 2001.
Frederik Kolenda, cofounder and ceo of Designers & Friends, will remain at the helm of the company. Its managers will report to Vente-Exclusive.com, which is in charge of developing the Vente-Privée.com group in northern Europe by maximizing synergies and know-how.
Founded in 2010 by Kolenda and Peder Wuth, Designers & Friends hosts flash sales of branded goods at discounts ranging from 50 percent to 70 percent. The acquisition comes after Vestiaire Collective, the European seller of pre-owned fashion, launched in Scandinavia earlier this year.
“We see the traditional wholesale business shifting to international online players,” said Michael Hillmose, head of international affairs of Dansk Fashion and Textile, noting that Zalando, H&M, StylePit, Asos, Boozt, Nelly, eBay and Amazon are currently among the largest players in the Danish online market.
Vente-Privée partners with more than 9,500 brands in sectors including ready-to-wear, fashion accessories, homewares, toys, sports equipment, electronics, fine food, wine, theater tickets and holidays.
It operates in 12 countries: France, Italy, Spain, Germany, the United Kingdom, Austria, Belgium, Luxembourg, the Netherlands, Switzerland, Brazil and Mexico.