Fifteen months later, Hudson’s Bay Co (HBC), the parent company, has taken a large write-down—$116 million —on the purchase because of how slow the benefits of the deal have been to materialize so far.

To be sure, Gilt had been shriveling for years when HBC bought it, the site once valued at more than $1 billion. But HBC had been hoping to turn it around and use its prominence with hip, young shoppers, and tech, to build up Saks’ online discount business in a major way in much the same way Nordstrom’s (JWN) acquisition of HauteLook a few years earlier had. Instead, Gilt has been plagued by weak traffic and not proven enough of a boost for Saks Off 5th, which has suffered lower sales.

The results were part of a quarterly report on Tuesday from HBC, which also owns Lord & Taylor among other chains, that reflected what the retailer’s chief executive Jerry Storch called a “challenging”and discount-driven environment for department stores. Comparable sales in the holiday season quarter fell 5.9% in HBC’s off-price (discount) division and 2% in its European chains, more than offsetting modest growth at its North American department stores. (Saks Fifth Avenue eked out a 0.1% increase for the quarter, small to be sure, but at least better than Nordstrom and Neiman Marcus’ full service stores.)

Despite the disappointing results, Storch defended the Gilt deal to investors and analysts, saying it was providing the overall company with needed state of the art tech, but perhaps more importantly, raising its profile with the young adults it is trying to win over. Gilt contributed $177 million to the company’s top line last quarter, or 4% of sales.

“I still think we got it for a great price,” Storch told analysts on a conference call Wednesday morning. “It just turned out to be more complicated than we thought,” he added, in reference to the challenges of integrating the computer systems at Gilt and Saks Off Fifth.

To be fair, Gilt is not the only e-commerce acquisition proving to be a dud, so far at least, for a major department store. Nordstrom did well with HauteLook, but last year took a $197 million write-down for Trunk Club, more than half what it paid. Yet the fact that HBC took a write down suggests it doesn’t see the results shortfall from Gilt as something it can make up quickly, if ever.

Indeed, there are concerns Gilt’s business model is past its prime. After the Great Recession, Gilt was among the first companies to pioneer the “flash sale” e-commerce model in the U.S., which sells heavily discounted fashion items for a limited time to members. But many early entrants fizzled in recent years, as big retailers like Nordstrom, Neiman Marcus, and even Saks fought back with their own flash sales.

The disappointment in Gilt could raise concerns about HBC’s ability to integrate acquisitions, which is part and parcel to its growth strategy, after it made a number of them in quick succession. HBC last year bought a Dutch retailer and the year before that German department store chain Kaufhof for $3.3 billion, among other big deals. It is also reportedly interested in making a bid for Neiman Marcus, something it has declined to comment on.

Still, Storch laid out some of initiatives to get more out of Gilt: among them, the combination of the Gilt and Saks Off 5th sites to facilitate merchandise integration, allowing items from Saks Off Fifth to be sold on Gilt, he said.

“We really do think we have a great asset in Gilt and it’s a fabulous brand name.” That may be true but it’s a brand name that’s not worth quite as much as HBC thought last year.