- Associated Press - Monday, December 20, 2010

BERLIN (AP) - EBay Inc. says it will acquire a German online shopping club for euro150 million ($197 million) to strengthen the company’s fashion business in Europe.

The U.S. online marketplace operator said Monday that the acquisition of Germany’s brands4friends, which is subject to regulatory approval, is expected to close in the first quarter of 2011.

EBay says brands4friends, founded in 2007, has some 3.5 million members and specializes in selling products from renowned fashion and lifestyle brands at reduced prices by way of daily limited-time deals. Brands4friends employs about 200 people and is headquartered in Berlin.

Brands4friends’ business model is similar to those of several U.S. websites, where shoppers must become members before they can indulge in a frequently changing selection of designer goods.

The acquisition puts eBay, which is based in San Jose, Calif., even more in competition with online retailer Amazon.com Inc. Amazon said in October it was buying BuyVIP.com, a members-only online shopping site that operates in a handful of European countries, including Germany and Spain.

EBay has been working to beef up its fashion business. It has a fashion site at fashion.ebay.com and offers limited-time deals through a “Fashion Vault” at fashionvault.ebay.com. The company also offers a fashion app for the iPhone.

EBay said that as part of its purchase of brands4friends, it will get that company’s stakes in brands4friends.jp, a Japanese version of the site, and SecretSales.com, a U.K.-based shopping club.

EBay said its research shows online shopping clubs now make up about 20 percent of Europe’s online fashion sales.

Shares of eBay fell 19 cents to $29.63 in early afternoon trading Monday.