Gilt is an online shopping and lifestyle website based in the United States, launched in 2007 At one time valued at over $1 billion on paper, the company was eventually sold to Hudson's Bay Company for approximately $250 million, far lower than the total obtained from its investors. Prior to the Hudson’s Bayacquisition, sales were exceeding growth projections but the firm had not been profitable yet. On June 4, 2018, Boston, Massachusetts-based Rue La La acquired Gilt from HBC.
History
Gilt Groupe is based in New York City with warehouses in Brooklyn, New York, Las Vegas, Nevada, and Louisville, Kentucky. Founder Kevin P. Ryan modeled Gilt after Vente-Privee, an online fashion retailer in France. The original business plan consisted of "flash sales," selling a limited number of luxury designer items at steep discounts for brief periods. The company launched women's clothing and accessories in November 2007 and menswear in April 2008. It added Gilt Groupe Japan, Gilt Fuse, and travel site Jetsetter in 2009. It later added, Gilt City and Gilt Home in 2010 and Gilt Taste in 2011. In 2012, the company entered a partnership with Jason Binn's upmarket lifestyle magazine, DuJour. In 2009, growth equity firm General Atlantic led a series Cfunding round, joined by previous investor Matrix Partners.. By February 2014, Gilt Groupe was preparing for an IPO. According to Business Insider, during its "hyper-growth years, the company overextended itself and lost focus", as the expanded business segments such as "Full-price retail, travel, and food were sucking resources from Gilt's core categories — discounted women's fashion", and Gilt was forced to sell these non-core businesses at a loss. Flash sales companies were also seeing slower growth, thanks in part to e-mail fatigue. The IPO kept getting delayed and ending up never happening, while the firm never reached profitability. By 2015, Gilt was raising money "at a lower valuation than the $1 billion at which it reportedly raised $138 million in 2011". Such a cash infusion is known as "down round" which hurts employee morale and devalues the founders' stakes. On January 7, 2016, Gilt Groupe announced its acquisition by Hudson’s Bay Company, owner of luxury department store chains Hudson’s Bay, Lord & Taylor and Saks Fifth Avenue, for $250 million, less than the amount raised from investors in all of the company's prior funding rounds. In June 2018 it was announced the HBC would be selling Gilt to Rue La La. The sale was reported to be for less than half of what HBC paid for Gilt, two years prior, with a price of $100 million. On October 2, 2019 Gilt Groupe and Simon Property Group announced a joint venture for ShopPremiumOutlets.com, an online shopping platform focused on its outlet malls, to create a new e-commerce platform dedicated to value shopping.
Business
Gilt Groupe visitors must be members in order to view sales. Sales last 36–48 hours and feature merchandise from a single brand or small groups of brands. The firm purchases vendor inventory at an extreme discount, adding a margin in order to make a profit. On August 22, 2011, Gilt Groupe added a Facebook shopping section. Android and iPhoneapps allow mobile shopping, and access is also available for other smartphone and tablet devices.
Book
printed a history of Gilt Groupe in 2012 written by two of its founders, Alexis Maybank and Alexandra Wilkis Wilson. By Invitation Only: How We Built Gilt and Changed the Way Millions Shop was published before Gilt was bought out by Hudson's Bay; At that time the firm was valued at more than $1 billion, over four times greater than its eventual selling price.
