Online flash sales - just a flash in the pan or a long-term investment? Sir Philip Green certainly thinks online flash sites have legs, having just bought a 25% stake in Australian website Mysale.

Online flash sales - just a flash in the pan or a long-term investment? Sir Philip Green certainly thinks online flash sites have legs, having just bought a 25% stake in Australian website Mysale.

Mysale is Australia and Asia’s biggest online flash sales site, where consumers can snap up clothing and homeware brands at a fraction of their original retail price. The company is booming: it has 10 million members and reaped sales of £102m last year.

The deal marks Green’s first taste of pureplay retail. And the deal isn’t just a 25% stake in a growing business. The billionaire has used his nous and struck a deal to supply MySale with excess clothing and homeware stock from his own portfolio of retail brands such as Topshop, Bhs and Dorothy Perkins.

With the air of exclusivity, flash sales sites seem perfect fodder for consumers who, during these tough times, are still hungry for a bargain. Still, flash sites aren’t as buoyant as they might first appear. Just ask former Harrods owner Mohamed Al-Fayed who closed down his luxury off-price site Cocosa earlier this year, less than three years after buying it from Bauer Media Group.

A statement from the company in October said: “…the costs of continuing to build the brand to market leadership were deemed too high to merit material further investment.”

Looking at other flash sales sites, it’s fair to say French-based Vente Privee has yet to fully capture the UK market while although Secretsales made a loss of £3.9m in 2012 (its most recently available results). However, this poor performance certainly hasn’t scared off investors - like MySale, Secretsales has just bagged its own investment, in the form of £4.5m.

BrandAlley and Achica are the biggest players in the UK market and MySale will have to work hard to grab marketshare. Still, with the company uprooting its headquarters to the UK and opening a distribution centre in Corby, there’s determination that this new entrant into the UK discount etail market won’t be gone in a flash.

  • Suzanne Bearne is a freelance journalist specialising in fashion, retail and travel. She can be found tweeting at @sbearne