NEW YORK (Reuters) - Web commerce company eBay Inc said it would buy brands4friends, Germany’s largest online shopping club, for about $200 million in cash to strengthen its European business.
EBay does not expect the acquisition to have a material impact on its 2011 financial results. The deal is expected to close in the first quarter of 2011.
Germany is eBay’s second-largest market after the United States, accounting for $1.14 billion, or 13 percent, of its total net revenue in 2009.
But eBay warned in a U.S. regulatory filing earlier this year that winning new shoppers in Germany, among other markets, could become “more difficult and costly,” given how mature e-commerce is there. EBay’s main competitors in Germany include the e-commerce sites, Quelle and Otto.
Brands4friends, which has about 3.5 million members in Germany, sells goods from fashion and lifestyle brands including Buffalo, Calvin Klein and Diesel, for discounts of as much as 70 percent, according to its website.
EBay estimated that online shopping clubs now make up 20 percent of Internet fashion sales in Europe.
As part of the agreement, eBay said it would assume brands4friends’ stake in British shopping club SecretSales.com and in Japan’s brands4friends.jp.
EBay shares were down 0.9 percent at $29.56 in morning Nasdaq trading.
Reporting by Phil Wahba in New York and Abhinav Sharma in Bangalore; Editing by Greg Mahlich and Lisa Von Ahn