Simon Property (SPG) forms online shopping venture with Rue Gilt Groupe.
Simon Property Group (SPG) announced today that is has formed a partnership with Rue Gilt Groupe (RGG) to combine the respective online shopping platforms of each company. The new venture will integrate SPG's Shop Premium Outlets marketplace with RCG's existing Rue La La and Gilt brands to create a diversified online shopping platform with expected sales of approximately $1 billion.
Under the terms of the agreement, Simon will contribute $280 million to the venture, including the value of its existing web properties. Simon also said that its online staff would transition to RGG, who will be responsible for day-to-day management of the combined platforms. SPG's percentage ownership in the expanded RGG was not disclosed.
Simon Property Group (SPG) is the largest REIT in the U.S. with portfolio interests in 235 regional malls and outlet centers aggregating 190 million square feet. With respect to the RCG transaction, Chairman and CEO David Simon noted: "We believe online value shopping presents a tremendous business opportunity for Simon, given our credibility, trust and relationships with brands, retailers and shoppers."