Gilt Groupe has become a symbol of innovation in online luxury, and is the most elegant of the “new retail” firms whose meteoric growth has sent venture capitalists and entrepreneurs into a 1999-style frenzy this year.
An engineer of Gilt’s approach is veteran tech executive Kevin Ryan. After selling Internet ad serving company DoubleClick to Google Inc. for $3 billion, Ryan started six companies during a three-year period, including Gilt and media site Business Insider. Because Ryan grew up in France and married a French woman, he was familiar with the highly successful private-sale site Vente-Privee.
“I always look for things that are still not being done online and I ask, why is that? I was walking by a sample sale on 18th Street and saw 200 people lined up. It was cold and they were suffering, but the passion was there,” he said.
Unusual moves for an e-commerce start-up included hiring veterans from high-profile firms like Susan Lyne, former president and chief executive officer of Martha Stewart Living Omnimedia Inc.
Gilt has continued to devise the unexpected, including commissioning special edition merchandise at full price, selling Target designer collaborations in advance of when they hit the mass retailer’s floor, selling through Facebook and mobile, offering limited edition Starbucks coffee to Starbucks Gold Card members only, launching Brooks Brothers’ younger Back to Campus line and targeting the ultrarich with Gilt Noir. Its latest project: It plans to open a full-price men’s store, and intends to launch one other full-price store next year in a category still to be determined, said Ryan.
Gilt has more than 100 open jobs and is on track to do more than $500 million this fiscal year, Ryan added, although the company has admitted it failed to meet its $400 million target in fiscal 2010.
Every two months, management meets to decide which of a long list of ideas to implement. Under consideration are mass-market sales under a different brand and providing e-commerce services to luxury retailers.
“It’s good to launch new things,” said Ryan, “but to do them well, we need to make sure we don’t do too many.”