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Gilt Groupe Flirts With Adding Beauty Brands

Luxury sample sale e-tailer Gilt is considering adding beauty as its fifth pillar.

A virtual door has opened for beauty brands: the luxury sample sale e-tailer Gilt Groupe.

Over the last 15 months, Gilt has built its invitation-only, e-commerce business by linking arms with high-end accessories and ready-to-wear brands — Diane von Furstenberg, Vera Wang and Chloé, to name a few — and has since expanded to the children’s and home categories. Gilt offers its members — which number more than 800,000 shoppers — goods at up to 70 percent off the retail price during sales that last 36 hours.

Now, Gilt is considering adding beauty as its fifth pillar.

Gilt first dabbled in beauty last month, hosting a Perricone MD Cosmeceuticals sale and, on March 27, offering Smashbox Cosmetics. The private equity firm TSG Consumer Partners — which tends to favor beauty brands sold in high-growth retail channels, such as TV retailing and the Internet — invests in Perricone and Smashbox. A spokeswoman for Smashbox said the cosmetics company’s sale was a trial run. Perricone could not be reached for comment.

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Gilt’s co-founder and chief marketing officer, Alexandra Wilkis Wilson, said of the company’s approach to expansion, “Last summer, we slowly eased into the children’s and home decor categories. We did subtle testing to see if there was an appetite for them.” As for beauty, Wilson said, “We are getting our feet wet, but everything we’ve found so far indicates that there’s interest” from the Gilt shopper. The e-tailer has a dedicated beauty buyer — Nadine Iskenderian is Gilt’s director of beauty — and is actively scouting prestige beauty brands, said Wilson. She noted that after the Smashbox sale, the company received about 10 e-mails from interested beauty firms.

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Consumers have already shown their willingness to shop for beauty online.

In 2008, health and beauty products accounted for 3.6 percent, or $4.7 billion, of total retail e-commerce spending of $130.1 billion, according to digital tracking firm ComScore.

Wilson said Gilt will approach beauty in the same way it has the rtw and accessories businesses. Lines that are a fit for Gilt are “the types of brands in high-end department stores. We need the price points to be high enough for the sale to be meaningful to the customer.”

For beauty, that may mean bundling products together, as Gilt did for the Smashbox sale. For instance, a Masters Class Brush collection housed in a metallic case sold for $45, down from the retail price of $89, and a Bare Beauty Kit, consisting of two lip glosses and a face powder, sold for $26, down from $54.

Given the tough retail and economic climate, Gilt’s approach may be even more palatable to prestige beauty firms, which, prior to the past holiday season, have long abstained from discounting. “These challenging times are forcing brands to think outside the box,” said Wilson. “We have strong integrity and we make our decisions with the brand. The brand is in full control of the sale.”

As for when more beauty brands will hit the site, she said, “You are going to see more and more beauty as the weeks go by. We have great brands in the pipeline.”