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Gilt Groupe

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Gilt Groupe
Company typeSubsidiary
IndustryE-commerce
Founded2007
FoundersKevin P. Ryan, Michael Bryzek, Phong Nguyen, Alexis Maybank, Alexandra Wilkis Wilson
Headquarters
New York, N.Y.
,
USA
Key people
Jonathan Greller (President)[1]
OwnerRue La La
Number of employees
More than 1000 [2]
Websitegilt.com

Gilt is an online shopping and lifestyle website based in the United States, launched in 2007.[3] On January 7, 2016, The company was sold to Hudson's Bay Company for approximately $250 million. Prior to the Hudson’s Bay acquisition, sales were exceeding growth projections but the firm had not been profitable yet.[4][5][6][7] On June 4, 2018, Boston, Massachusetts-based Rue La La acquired Gilt from HBC.[8]

History

Gilt Groupe is based in New York City with warehouses in Brooklyn, New York, Las Vegas, Nevada, and Shepherdsville, Kentucky.

The company was co-founded by Kevin P. Ryan, Alexis Maybank, and Alexandra Wilson;[9] who 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.[4]

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.[10] It later added, Gilt City and Gilt Home in 2010 and Gilt Taste in 2011.[11]

In 2009, growth equity firm General Atlantic led a series C funding round, joined by previous investor Matrix Partners..[12][13] By February 2014, Gilt Groupe was preparing for an IPO.[14]

In 2010, Gilt acquired luxury deal-of-the-day site Bergine.[15] This was the first of several acquisitions.

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 key means for flash sales to be promoted) with e-mail providers increasingly classifying these messages as spam). 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.[4][5][6][7]

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.[16]

In June 2018 it was announced the HBC would be selling Gilt to Rue La La.[17][18]

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.[19]

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.[20] Android and iPhone apps allow mobile shopping, and access is also available for other smartphone and tablet devices.

Book

Penguin Group 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;[21] At that time the firm was valued at more than $1 billion,[22] over four times greater than its eventual selling price.

References

  1. ^ Team | Gilt Groupe | About. Gilt.com.
  2. ^ Gilt Groupe - Company Overview
  3. ^ "Author Series with Alexis Maybank of Gilt Groupe". New York Technology Council. August 7, 2012. Archived from the original on 2021-12-20.
  4. ^ a b c "Four years ago Gilt Groupe was the hottest startup in New York — Here's what happened". Business Insider. Retrieved 2018-05-23.
  5. ^ a b O'Brien, Sara Ashley. "Has Gilt Groupe hit the clearance rack?". CNNMoney. Retrieved 2018-05-23.
  6. ^ a b "Gilt Groupe sale leaves winners, losers and a cautionary tale". www.bizjournals.com. Retrieved 2018-05-23.
  7. ^ a b "Gilt Groupe's Very Cloudy Future". Recode. Retrieved 2018-05-23.
  8. ^ Segran, Elizabeth (2018-06-04). "Breaking: Rue La La acquires Gilt Groupe". Fast Company. Retrieved 2019-10-31.
  9. ^ Kucera, Danielle (June 21, 2011). "Stilettos Invade Startups as Niche-Shopping Sites Attract Women". www.bloomberg.com. Retrieved 2020-09-23.
  10. ^ Shambora, Jessica (September 30, 2009). "Gilt Groupe's Jetsetter takes off". CNN.
  11. ^ Fabricant, Florence (2011-05-17). "Gilt Taste Arrives, With Ruth Reichl at the Helm". The New York Times.
  12. ^ McMahan, Ty. "Venture Capitalists Prove They Have A Fashion Sense". The Wall Street Journal. Retrieved 16 December 2015.
  13. ^ "Gilt Groupe, Inc. Announces New Growth Capital Investment". PRNewswire. Retrieved 16 December 2015.
  14. ^ Strugatz, Rachel (13 February 2014). "Gilt IPO Puts Eyes on Flash Model". WWD. Retrieved 13 February 2014.
  15. ^ Fowler, Geoffrey A. (2010-10-26). "Gilt Makes its First Acquisition: Bergine". Wall Street Journal.
  16. ^ "Gilt Groupe to Announce Sale to Saks Fifth Avenue Owner as Soon as Thursday Morning". Re/code. Archived from the original on 2016-01-07. Retrieved 2016-01-07.
  17. ^ La, Rue La. "Rue La La to Acquire Gilt". www.prnewswire.com. Retrieved 2019-06-18.
  18. ^ "HBC To Shutter Home Outfitters Chain, Up To 20 Saks OFF 5TH Stores - Retail TouchPoints". www.retailtouchpoints.com. Retrieved 2019-06-18.
  19. ^ "Simon Property to invest $280M in online shopping venture". Recode. Retrieved 2019-10-02.
  20. ^ August 22, 2011 Gilt goes after Facebook shoppers internetretailer.com
  21. ^ Essential Business Reads Business Week 2012-04-13
  22. ^ Alexis Maybank and Alexandra Wilkis Wilson, By Invitation Only: How We Built Gilt and Changed the Way Millions Shop Penguin Group, 2012
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