Sep 1, 2010
Showroomprive.com receives 37 mln Euro investment
Sep 1, 2010
LONDON, Aug 31 (Reuters) - Venture capital firm Accel Partners is investing 37 million euros ($47 million) to buy a minority stake in France's Showroomprive.com, one of a number of fast-growing members-only online outlets for designer goods.
Accel, which has previously backed Facebook, Baidu and Admob, said the investment would complement its interests in other social commerce sites. These include Groupon, a site that offers daily deals to groups of a certain minimum size.
Accel said it was acquiring a significant minority stake but declined to elaborate.
Showroomprive.com is France's second-biggest private-sale site after vente-privee.com, in which private-equity firm Summit Partners bought 20 percent in 2007.
Such sites allow fashion houses to sell excess inventory at large discounts without damaging their brand by selling to a limited group of people. Often, new members have to be introduced by existing members of the club.
In the United States, invitation-only sites such as Gilt Groupe, Rue La La and Ideeli are thriving.
Showroomprive.com has 5 million members and made revenue of 75 million euros last year by selling goods from the likes of Calvin Klein, Dolce & Gabbana and Timberland. Chief Executive Thierry Petit says the company is profitable.
He plans to use the proceeds for expansion to build a new warehouse and possibly for acquisitions. The company is already active in Spain and wants to expand into Britain and Germany, Europe's most active e-commerce markets.
Petit says France is fertile ground for private-sale sites, since stores only hold sales at certain times of the year -- unlike other countries such as Britain, where sales are practically all year round.
"You could lose a lot of money in the UK," Petit told Reuters in a telephone interview. "To do it by ourself could be too ambitious," he said, adding that Showroomprive.com may seek a partner instead of buying a company or expanding by itself.
(Editing by David Holmes) ($1=.7911 Euro)
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