Gilt's Main Flash-Sales Biz Profitable -Co-FounderOnline retailer not looking for new funding soon
June 08, 2012
by Alistair Barr
Gilt Groupe’s main daily-deal business is profitable and the online fashion retailer is “doubling down” in this area, while eyeing overseas growth opportunities, co-Founder Alexis Maybank said on Thursday.
Gilt, which raised $138 million in May 2011 from investors including Japan’s Softbank, Goldman Sachs and General Atlantic, is not looking for new funding anytime soon, she added.
“The private markets have been good to us,” Maybank said in an interview with Reuters at the Internet Retailer Conference & Exhibition. “We don’t need to do anything for a while.”
Gilt, a pioneer of the flash-sales retail business model in the United States, has been considered a candidate for an initial public offering. Founded in 2007 by Maybank, Alexandra Wilkis Wilson and others, Gilt has grown quickly and generated about $500 million in revenue last year, putting it in the top 50 online retailers for the first time, according to Internet Retailer.
However, there have been questions about Gilt Groupe’s profitability as the company has launched a plethora of other businesses in recent years, including daily deals through Gilt City, Jetsetter travel offers, home goods and food.
In January, Maybank and other Gilt executives including co-founder and CEO Kevin Ryan, analyzed the company’s businesses to see what was “really working,” Maybank said.
With the main flash-sales business doing well, they decided to “double down” in that area, investing more in women’s merchandising and hiring more engineers to expand Gilt’s mobile web site and applications.
Gilt pulled back in other areas and moved some employees to new areas, Maybank added. For the company’s daily deal business, Gilt City, it decided not to have a local sales force in some cities, including Houston and Dallas, she said.
Gilt is now eyeing overseas expansion and has seen spikes in online traffic from countries including South Korea, Maybank said.
Gilt has updated its web site to handle overseas visitors by adding new languages, shipping, tax and tariff capabilities, she explained.
Gilt can now sell to about 200 countries, according to Maybank.