Gilt Groupe is an American

online shopping Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of th ...

site launched in 2007. In 2016 the company was sold to

Hudson's Bay Company The Hudson's Bay Company (HBC), originally the Governor and Company of Adventurers of England Trading Into Hudson’s Bay, is a Canadian holding company of department stores, and the oldest corporation in North America. It was the owner of the ...

for approximately $250 million, which was less than the $268 million taken from investors. Prior to the Hudson's Bay acquisition, sales were exceeding growth projections but the firm had not been

profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...

able yet. In 2018,

Boston Boston is the capital and most populous city in the Commonwealth (U.S. state), Commonwealth of Massachusetts in the United States. The city serves as the cultural and Financial centre, financial center of New England, a region of the Northeas ...

-based Rue La La acquired Gilt from Hudson's Bay.

History

Gilt Groupe is based in

New York City New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

with warehouses in

Brooklyn Brooklyn is a Boroughs of New York City, borough of New York City located at the westernmost end of Long Island in the New York (state), State of New York. Formerly an independent city, the borough is coextensive with Kings County, one of twelv ...

, New York City;

Las Vegas Las Vegas, colloquially referred to as Vegas, is the most populous city in the U.S. state of Nevada and the county seat of Clark County. The Las Vegas Valley metropolitan area is the largest within the greater Mojave Desert, and second-l ...

, Nevada; and

Shepherdsville, Kentucky Shepherdsville is a home rule-class city on the Salt River in Bullitt County, Kentucky, United States. It is the second largest city and seat of its county, located just south of Louisville. The population was 14,201 during the 2020 U.S. Cens ...

. 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; 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. The company launched women's clothing and accessories in November 2007 and

menswear Fashion is a term used interchangeably to describe the creation of clothing, footwear, Fashion accessory, accessories, cosmetics, and jewellery of different cultural aesthetics and their mix and match into Clothing, outfits that depict distinct ...

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 2009,

growth equity Growth capital (also called expansion capital and growth equity) is a type of private equity investment, usually a minority interest, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets ...

firm

General Atlantic General Atlantic, legal main entity General Atlantic Service Company, L.P., (also known as "GA") is an American growth equity firm providing capital and strategic support for global growth companies, headquartered in New York, United States. T ...

led a

series C A venture round is a type of funding round used for venture capital financing, by which startup companies obtain investment, generally from venture capitalists and other institutional investors. The availability of venture funding is among the p ...

funding round, joined by previous investor

Matrix Partners Matrix (formerly Matrix Partners) is a US-based venture capital investment firm. The firm invests in seed and early-stage companies in the United States and India, particularly in the software, communications, semiconductors, data storage, Int ...

. By February 2014, Gilt Groupe was preparing for an

IPO An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...

. In 2010, Gilt acquired luxury deal-of-the-day site Bergine. This was the first of several acquisitions. According to ''

Business Insider ''Business Insider'' (stylized in all caps: BUSINESS INSIDER; known from 2021 to 2023 as INSIDER) is a New York City–based multinational financial and business news website founded in 2007. Since 2015, a majority stake in ''Business Inside ...

'', 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. On January 7, 2016, Gilt Groupe announced its acquisition by Hudson's Bay Company, owner of luxury

department store A department store is a retail establishment offering a wide range of consumer goods in different areas of the store under one roof, each area ("department") specializing in a product category. In modern major cities, the department store mad ...

chains Hudson's Bay,

Lord & Taylor Lord & Taylor was an American department store chain founded in 1826 by Samuel Lord. It had 86 full-line stores in the Northeastern United States at its peak in the 2000s, and 38 locations at the time of its liquidation in 2021. The Lord & Tay ...

and

Saks Fifth Avenue Saks Fifth Avenue (Colloquialism, colloquially Saks) is an American Luxury goods, luxury department store chain founded in 1867 by Andrew Saks. The first store opened in the F Street and 7th Street shopping districts, F Street shopping distric ...

, for $250 million. In June 2018 it was announced the HBC would be selling Gilt to Rue La La. On October 2, 2019, Gilt Groupe and

Simon Property Group Simon Property Group, Inc. is an American real estate investment trust that invests in shopping malls, outlet centers, and community/lifestyle centers. It is the largest owner of shopping malls in the United States and is headquartered in Indian ...

announced a

joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to acce ...

for ShopPremiumOutlets.com, an online shopping platform focused on its

outlet mall An outlet store, factory outlet or factory store is a brick and mortar or online store where manufacturers sell their merchandise directly to the public. Products at outlet stores are usually sold at reduced prices compared to regular stores du ...

s, to create a new

e-commerce E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...

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 A brand is a name, term, design, symbol or any other feature that distinguishes one seller's goods or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create and ...

or small groups of brands. The firm purchases vendor inventory at an extreme discount, adding a

margin Margin may refer to: Physical or graphical edges *Margin (typography), the white space that surrounds the content of a page * Continental margin, the zone of the ocean floor that separates the thin oceanic crust from thick continental crust *Leaf ...

in order to make a

. On August 22, 2011, Gilt Groupe added a

Facebook Facebook is a social media and social networking service owned by the American technology conglomerate Meta Platforms, Meta. Created in 2004 by Mark Zuckerberg with four other Harvard College students and roommates, Eduardo Saverin, Andre ...

shopping section. Android and

iPhone The iPhone is a line of smartphones developed and marketed by Apple that run iOS, the company's own mobile operating system. The first-generation iPhone was announced by then–Apple CEO and co-founder Steve Jobs on January 9, 2007, at ...

apps allow mobile shopping, and access is also available for other

smartphone A smartphone is a mobile phone with advanced computing capabilities. It typically has a touchscreen interface, allowing users to access a wide range of applications and services, such as web browsing, email, and social media, as well as multi ...

and tablet devices.

Book

Penguin Group Penguin Group is a British trade book publisher and part of Penguin Random House, which is owned by the German media company, media Conglomerate (company), conglomerate Bertelsmann. The new company was created by a Mergers and acquisitions, mer ...

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,Alexis Maybank and Alexandra Wilkis Wilson, ''By Invitation Only: How We Built Gilt and Changed the Way Millions Shop''

, 2012 over four times greater than its eventual selling price.

References

External links

* {{DEFAULTSORT:Gilt Groupe Hudson's Bay Company Companies based in New York City Online clothing retailers of the United States Internet properties established in 2007 2007 establishments in New York City 2016 mergers and acquisitions 2018 mergers and acquisitions