Provide Commerce buys RedEnvelope in bankruptcy

NEW YORK, May 28 (Reuters) - Provide Commerce Inc has acquired the assets of fellow online gift retailer RedEnvelope Inc (REDEQ.PK) in a bankruptcy auction.

Provide Commerce, whose websites include ProFlowers and Cherry Moon Farms, will assume full ownership of RedEnvelope on June 23, it said in a statement late on Tuesday. It plans to keep the site as a separate operating brand.

Nine-year-old RedEnvelope, which filed for bankruptcy protection April 17, had suffered from a decline in sales as consumers cut back on spending.

Terms of the deal were not disclosed.

Provide Commerce, however, did beat out an earlier $5.7 million bid from Creative Catalogs Corp, which had provided some of the bankruptcy financing for RedEnvelope. Creative Catalogs is entitled to a break-up fee of as much as 4.5 percent of that sum, according to court documents. (Reporting by Emily Chasan; Editing by Lisa Von Ahn)