Jeff Bennett's Blog

Boston-based Retail Convergence Incorporated (RCI) who operates the rapidly emerging Rue La La web store is being acquired by GSI Commerce (NASDAQ: GSIC), for $180 million in cash and stock and up to $170 million in follow-on payments, depending on RCI’s performance.

Oo La La!!!

RCI owns and operates both Rue La La, a private website that sells discounted premium designer clothing and accessories, and Smart Bargains, a more affordable online clearinghouse for clothing, jewelry, and home and kitchen goods. Rue La La is famous for being an invitation-only site generally limited to high-net-worth individuals. But GSI said yesterday that for a limited, 48-hour period, anyone can join Rue La La by going to www.ruelala.com/gsi.

Three really interesting things about this story:

1.  What an unbelievalbe transformation of a company that seemed to be going nowhere…the old Smart Bargains.   I was invited into by a friend who is very enthusiastic about Rue La La.  I tried it out.  Very contemporary offering of some old line principles of inventory clearance.

2.  A nice proof point that we can build consumer Internet companies in New England…I know we can…there are many Rue La La’s in our midst.

3.  Valuation looks very healthy.  We dont know all the facts/stats of course as this was a private company.   But the growth trajectory must have been pretty impressive to command this valuation and tpe of structure.

Congrats to Ben Fishman and his talented team!  Great news for them…and for all those building consumer Internet venturs as well.