eBay to Buy German Website for $200 Million

Berlin–The battle for growth in the online apparel market took another turn today as e-commerce giant eBay revealed plans to buy brands4friends, Germany’s largest online fashion and lifestyle shopping club in a deal worth $200 million.

EBay, which already generates more than $5.4 billion in apparel footwear, and accessories sales each year through its online marketplace, says the move will strengthen its position as a “leading European online fashion destination.”

Expanded European Presence

“We want to give our customers the best possible fashion experience online,” says 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 are a fast growing part of the online fashion market, and now account for around 20% of online fashion sales in Europe, according to eBay’s own research.

Founded in 2007, brands4friends sells cut-price fashion and lifestyle brands–including Buffalo, Calvin Klein and Diesel–to its 3.5 million members, through limited special offers which change on a daily basis. Lines include overstocks from current collections as well as “off season” goods and special collections. The Berlin-based company employs 200 people.

“EBay is the perfect partner for us,” explains Sergio Dias, brands4friends’ ceo. “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.”

In the last 18 months, eBay has invested heavily in its fashion business, improving its online shopping experience and opening the eBay Outlet in the United Kingdom and Germany, which lets its customers buy direct from leading fashion brands.
eBay has also partnered with brands for flash sales and daily deals at significant discounts for consumers and launched a global fashion iPhone application that permits consumers  to buy via their mobile devices.

Globally, top designers such as Derek Lam have also created exclusive fashion collections for eBay customers. As part of today’s deal eBay will assume brands4friends’ equity interests in United Kingdom shopping club SecretSales.com and in Japan, brands4friends.jp.

EBay rival Amazon has also recently relaunched its apparel business, while Google last month launched a website called Boutiques.com which enables consumers to run their own “personalised boutiques” with the help of recommendations and advice from celebrities. As such it represents a significant new direction for the company and for the online apparel market in general.

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