Flash-sale Giant Makes AcquisitionGilt Groupe Inc. buys Bergine.com, a 7-month-old, San Francisco-based seller of discounted deals.
October 26, 2010
Crain's New York
by Adrianne Pasquarelli
After three years in business, flash-sale specialist Gilt Groupe Inc., which made online shopping for discount luxury apparel commonplace, has announced its first acquisition.
Gilt City, the company’s service and experience arm, is buying Bergine.com, a 7-month-old, San Francisco-based seller of discounted deals. The move is expected to give Manhattan-based Gilt a stronger foothold on the West Coast, since Bergine already boasts deals with several California restaurants, spas and entertainment providers.
“Bergine shares our core philosophy of carefully selecting the highest quality local experiences—and then providing members amazing prices for these luxury opportunities,” said Gilt Chief Executive Kevin Ryan, in a statement.
Patrica Calfee, who co-founded Bergine in March with her husband, Ian Picache, will stay on as head of West Coast operations for Gilt City. Financial details of the deal were not disclosed.
Experts say the purchase is a smart move, especially given Gilt’s quick race to prominence since its 2007 launch. The company, which has 3.4 million members, began the Gilt City division earlier this year and now offers discounts at local venues like the Townhouse Spa and the Brooklyn Museum.
Gilt expects 2010 revenue of between $400 million and $500 million. But these days it faces some tough competition—Manhattan-based Ideeli is closing in on Gilt’s stylish heels with 3 million members, revenue of $150 million and its own localized services site under the label Ideel Access. Los Angeles-based Haute Look, a $100 million company, also promotes services along with the apparel sales on its site.
“Moving quickly is essential, given how fast these companies can grow,” said Sucharita Mulpuru, principal retail analyst at Forrester Research. “[Gilt] probably decided to buy a player that had customers, a sales force and some inroads with merchants already in a market where it would have been more difficult to get started from scratch.”