Gilt Groupe

Gilt Groupe
Subsidiary
Industry E-commerce
Founded 2007
Founders Kevin P. Ryan
Dwight Merriman
Alexis Maybank
Alexandra Wilkis Wilson
Michael Bryzek
Phong Nguyen
Headquarters New York, N.Y., USA
Key people
 Jonathan Greller (President)[1]
Kristen Sosa (Chief Merchant)[1]
Owner Hudson's Bay Company
Number of employees
 More than 1000 [2]
Website gilt.com

Gilt is an online shopping and lifestyle website based out of the United States. Gilt Groupe was launched in 2007 by five founders.[3] At one time valued at over $1 billion on paper, the company was eventually sold to Hudson's Bay Company for approximately $250 million, which was far lower than the total obtained from its investors. Prior to the Hudson’s Bay acquisition, sales were exceeding growth projections but Gilt Groupe had not been profitable yet.[4][5][6][7]

History

Gilt Groupe is based in New York, N.Y. 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. Ryan then recruited Mike Bryzek, Phong Nguyen, Alexis Maybank and Alexandra Wilkis Wilson to the original team. Gilt's original business of "flash sales," selling a limited number of luxury designer items at steep discounts for brief periods, made it an immediate hit.[4]

The company launched women's clothing and accessories in November 2007 and menswear in April 2008. The company added Gilt Groupe Japan in February 2009, Gilt Fuse in August 2009, and travel site Jetsetter in September 2009.[8] Gilt later added, Gilt City in April 2010, Gilt Home in May 2010 and Gilt Taste in 2011 completed the flurry of brand expansion.[9] In 2012, the company launched a partnership with Jason Binn's upmarket lifestyle magazine, DuJour.[10]

In 2009, growth equity firm General Atlantic led a series C funding round, joined by previous investor Matrix Partners. General Atlantic’s managing director, Anton Levy, joined the board of directors.[11][12] By February 2014, Gilt Groupe was preparing for an IPO.[13]

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, yet e-mail providers were increasingly classifying these messages as spam). The long-rumored IPO kept getting delayed and ending up never happened, while Gilt could never reach 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, less than the amount raised from investors in all of the company's prior funding rounds.[14]

Business

Gilt Groupe visitors must be members in order to view sales. New sales last 36–48 hours and feature merchandise from a single brand or small groups of brands. Gilt purchases vendor inventory at an extreme discount, and then adds a margin on top of the discounted price in order to make a profit. On August 22, 2011, Gilt Groupe added a Facebook shopping section.[15] Android and iPhone apps allow mobile shopping. Access is also available via mobile web 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;[16] At that time the firm was valued at more than $1 billion,[17] over four times greater than its eventual selling price.

See also

References

  1. 1 2 Team | Gilt Groupe | About. Gilt.com.
  2. ↑ Gilt Groupe - Company Overview
  3. ↑ "Author Series with Alexis Maybank of Gilt Groupe". New York Techology Council. August 7, 2012.
  4. 1 2 3
  5. 1 2
  6. 1 2
  7. 1 2
  8. ↑ Shambora, Jessica (September 30, 2009). "Gilt Groupe's Jetsetter takes off". CNN.
  9. ↑ Fabricant, Florence (2011-05-17). "Gilt Taste Arrives, With Ruth Reichl at the Helm". The New York Times.
  10. ↑ "Catching Up With Jason Binn" wwd.com
  11. ↑ McMahan, Ty. "Venture Capitalists Prove They Have A Fashion Sense". The Wall Street Journal. Retrieved 16 December 2015.
  12. ↑ "Gilt Groupe, Inc. Announces New Growth Capital Investment". PRNewswire. Retrieved 16 December 2015.
  13. ↑ Strugatz, Rachel (13 February 2014). "Gilt IPO Puts Eyes on Flash Model". WWD. Retrieved 13 February 2014.
  14. ↑ "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.
  15. ↑ August 22, 2011 Gilt goes after Facebook shoppers internetretailer.com
  16. ↑ Essential Business Reads Business Week 2012-04-13
  17. ↑ 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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