The hoopla over online private sales continues — and might even be justified. Last week was retail veteran Ellin Saltzman’s first in the office of fast-growing private sale company Gilt Groupe. Less than two years old, the firm is poised to generate more than $80 million in revenues this fiscal year, which ends June 30. In comparison, 10-year-old off-price e-tailer Bluefly — which, so far, has not tried the trendy one- or two-day, members-only format — posted revenues of $95 million last year with 85 employees.
Saltzman will consult for Gilt, as she did until December for Bluefly. “I hope to be able to introduce them to many designers and work with them on their assortment,” said the former fashion director for Saks Fifth Avenue, Bergdorf Goodman and Macy’s.
Known for high-quality merchandise that sells out within minutes, Gilt Groupe is one of a long list of retailers to enter the rapidly growing niche. Started by Louis Vuitton, Bulgari and eBay veterans Alexis Maybank and Alexandra Wilkis Wilson with $5 million in venture backing from Matrix Partners, Gilt Groupe brought in Susan Lyne of Martha Stewart Omnimedia Inc. as chief executive officer in September. Kevin Ryan, formerly ceo of DoubleClick, is chairman. Other staff hail from Polo Ralph Lauren, Bergdorf Goodman, Saks Fifth Avenue and Giorgio Armani.
Meanwhile, Onestop Internet, a Rancho Dominguez, Calif.-based e-commerce service provider with a stable of well-known fashion clients, is expanding into private sales and into Europe with backing from venture capital firm Bessemer Venture Partners.
The already profitable company closed its first round of funding for $13.3 million in October. In December, it bought well-known offline Los Angeles sample sale business Billion Dollar Babes for an undisclosed amount. In April, the company started holding online private sales three times a week and plans to open a European distribution center later this year.
The Outnet, Net-a-porter.com’s off-price store that debuted in April, has also held occasional private sales. The format is said to have been pioneered by Vente-Privee.com, which pulls in $500 million a year and has spawned more than 70 competitors in France, according to BusinessWeek. Competitors here include Rue La La, Ideeli, HauteLook and Editor’s Closet.