Gilt Groupe

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 American online shopping 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 Hudson's Bay.[8]

History

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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, Michael Bryzek and Phong Nguyen, with Alexis Maybank, and Alexandra Wilson joining shortly after the company's inception;[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.[citation needed] 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

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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

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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

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  1. ^ Team | Gilt Groupe | About Archived 2012-04-07 at the Wayback Machine. 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 (Press release). Retrieved 2019-06-18.
  18. ^ "HBC To Shutter Home Outfitters Chain, Up To 20 Saks OFF 5TH Stores - Retail TouchPoints". www.retailtouchpoints.com. 25 February 2019. 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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