Gilt Groupe

Gilt Groupe

File:Gilt logo.png
Company type	Subsidiary
Industry	E-commerce
Founded	2007
Founders	Kevin P. Ryan, Michael Bryzek, Phong Nguyen, Alexis Maybank, Alexandra Wilkis Wilson
Headquarters	New York City , U.S.
Key people	Jonathan Greller (President)
Owner	Rue La La
Number of employees	Over 1000
Website	gilt.com

Gilt Groupe is a U.S.-based online retail platform established in 2007. In 2016, it was acquired by Hudson's Bay Company for roughly $250 million, a figure below the $268 million initially invested. Although the company’s sales were surpassing expected growth before this acquisition, it had yet to achieve profitability. In 2018, the Boston-headquartered Rue La La purchased Gilt from Hudson's Bay.

History

Operating out of New York City, Gilt Groupe maintains distribution centers in Brooklyn, New York City; Las Vegas, Nevada; and Shepherdsville, Kentucky.

The enterprise was co-founded by Kevin P. Ryan, Michael Bryzek, and Phong Nguyen, with Alexis Maybank and Alexandra Wilson joining soon after its founding. The business model was inspired by Vente-Privee, a French online fashion retailer. Initially, Gilt focused on "flash sales," offering limited quantities of high-end designer products at significant discounts for short time frames.

Women's apparel and accessories were introduced in November 2007, followed by menswear in April 2008. The company expanded in 2009 by launching Gilt Groupe Japan, Gilt Fuse, and the travel site Jetsetter. Subsequent additions included Gilt City and Gilt Home in 2010, along with Gilt Taste in 2011.

In 2009, growth equity firm General Atlantic spearheaded a series C funding round, joined by returning investor Matrix Partners. By February 2014, preparations for an initial public offering (IPO) were underway.

The year 2010 marked Gilt’s first acquisition with luxury daily deal site Bergine, initiating a series of strategic purchases.

Business Insider reported that during its rapid expansion phase, the company stretched its resources too thin and lost strategic focus. Diversification into full-price retail, travel, and culinary ventures diverted attention from its core discounted women’s fashion segment. Consequently, these non-core divisions were divested at a loss. Challenges such as diminishing returns from flash sales—partly due to email fatigue and increased spam filtering—contributed to delays and eventual cancellation of the IPO. The company also failed to turn a profit during this period.

By 2015, Gilt was securing funding at valuations lower than the $1 billion valuation at which it raised $138 million in 2011—a so-called "down round"—which negatively impacted employee morale and diluted founders' equity stakes.

On January 7, 2016, Gilt Groupe disclosed its acquisition by Hudson's Bay Company—the proprietor of luxury department stores including Hudson's Bay, Lord & Taylor, and Saks Fifth Avenue—for $250 million.

In June 2018, Hudson's Bay announced plans to sell Gilt to Rue La La.

On October 2, 2019, Gilt Groupe partnered with Simon Property Group in a joint venture to launch ShopPremiumOutlets.com, an e-commerce platform dedicated to value shopping through Simon’s outlet malls.

Business

Access to Gilt Groupe's sales is restricted to registered members only. These sales typically run for 36 to 48 hours and highlight products from either a single brand or a select group of brands. The company acquires inventory from suppliers at significantly reduced prices and then applies a markup to generate profits. On August 22, 2011, Gilt Groupe introduced a shopping feature integrated with Facebook. Additionally, shopping on the platform is supported through dedicated Android and iPhone applications, with compatibility extending to various other smartphone and tablet devices.

Book

In 2012, Penguin Group published a detailed account of Gilt Groupe’s history authored by two of its co-founders, Alexis Maybank and Alexandra Wilkis Wilson. The book, titled By Invitation Only: How We Built Gilt and Changed the Way Millions Shop, was released prior to the acquisition by Hudson's Bay. At that point, the company’s valuation exceeded $1 billion, which was more than four times its later sale price.

External links

• Official website