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EBay Buys GSI for $2.4B To Close Gap With Amazon
Ebay Inc. on Monday ratcheted up its battle with e-tailing behemoth Amazon.com with a $2.4 billion deal to buy e-commerce and marketing service provider GSI Commerce, owner of designer and luxury goods flash sale site Rue La La.
The deal will take eBay one step further away from its decelerating auction model while strengthening the company's fulfillment and customer service operations, two of Amazon's strengths. But while flash sales are one of the fastest growing areas in fashion retailing, eBay has no plans to maintain ownership of Rue La La. Instead, it will divest 70 percent of the business, along with GSI's sports merchandise operation and 70 percent of its e-commerce retail aggregator ShopRunner.
It will retain GSI's ongoing Web management relationships with fashion brands such as Polo Ralph Lauren Corp., Donna Karan, Levi Strauss & Co., Kenneth Cole Productions Inc., Aropostale Inc., New York & Company Inc. and Dick's Sporting Goods Inc.
Rue La La and ShopRunner were deemed by eBay to be not core to its long-term growth strategy and majority stakes of the two will be sold to a new holding company to be led by...