The private sale channel just won’t quit.

This story first appeared in the June 3, 2010 issue of WWD. Subscribe Today.

Today, HauteLook, which runs private sales for brands, plans to reveal it has received $31 million in a third round of funding led by Insight Venture Partners, bringing total funding to $41 million.

The company, which launched in 2007, became profitable earlier this year. HauteLook plans to use the infusion to find new customers, expand categories, sell via mobile and increase social media marketing, said chief executive officer Adam Bernhard.

The company, which is based in Los Angeles, does not buy inventory, and has more than 2.5 million members and 175 employees.

HauteLook also recently made two key hires from established companies: general merchandise manager Arthur Lewis, who was previously senior vice president of adult merchandising for Old Navy, and director of men’s merchandising Tim Lewis, a 17-year veteran of Neiman Marcus, where he bought men’s designer collections and women’s couture shoes.

Meanwhile, new private sale companies continue to launch, although so far, no brick-and-mortar discounter has entered the space. is the latest entrant among perhaps a dozen in recent months, and aims to stand out by shipping items within 24 hours.

Private sale companies from Gilt Groupe to Rue La La to HauteLook say their sales are good marketing tools for brands.

A survey of HauteLook customers found that 75 percent had purchased a brand on the site they had never bought before. Then 50 percent of those went on to buy the same brand again — not necessarily at the HauteLook site — and 20 percent of those bought at full price.

“Working with HauteLook is an exceptional way to move excess merchandise in a manner that strengthens the Joe’s Jeans brand,” said Joe’s Jeans ceo Marc Crossman. “Reaching the site’s two million-plus members has built a new audience of brand ambassadors for us and created a new clientele for our full-price business.”

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