Nordstrom buys flash-sale site – could Montreal’s Beyond the Rack be next?

Yesterday flash-sale site HauteLook was acquired by Nordstrom Inc. for a reported $270 million.

HauteLook is one of a group of fast-growing companies that have grabbed a piece of the luxury market by selling clothes, typically at a discount, in limited-time online sales for shoppers who sign up as members.

According to TechCrunch, HauteLook was founded in 2007 and had raised $41 million in funding.

The HauteLook deal marks the first acquisition of a flash-sale company by a mainstream retailer which begs the question, who will be next? Cound it be Canada’s own Beyond The Rack?

HauteLook was widely acknowleged as #2 in the fashion flash-sale category behind Gilt Groupe but with 4 million members and 3.1 million visits in the U.S. last month according to Experian Hitwise, they weren’t far behind.

Nordstrom competitors Saks and Neiman Marcus have experimented in the flash-sale space with sporadic online events on their own websites but yesterday’s Nordstrom acquisition may have them shopping as well.

A closer look at Beyond The Rack’s numbers indicate that they’ll likely be pricing themselves in the same department as HauteLook. Last month the Montreal Gazette reported that Beyond The Rack has almost 3 million members after being founded in 2009 and raising $16.5 million in angel and VC money.

Both metrics shy of what HauteLook has accomplished to date, but in half the time. 

Beyond The Rack’s impressive growth trajectory should command a premium over HauteLook’s valuation if the right suitor comes shopping.