Nothing's sexier than a bargain. Sure, you can spend $1,340 on a Marc Jacobs sweater that's softer than a baby's skin — or you can buy the same sweater for $174 and be stylish and savvy. This potent cocktail of luxury and value has made Gilt Groupe — an e-commerce site that runs daily private sales of high-end designer apparel, accessories, and home furnishings discounted as much as 85% off — a breakout success amid sluggish consumer spending.
Gilt expects to rake in more than $500 million in revenue in 2010, 20 times what it reaped in 2008. "Companies like private sales because they maintain the exclusivity and integrity of their brands," says Sucharita Mulpuru, an analyst at Forrester Research. "Gilt's only big competitor is the outlet malls." Venture capitalists have embraced it as passionately as overstocked designers, pumping in $40 million this summer and pushing its value to about $400 million.
The members-only site has amassed more than 1 million users in two years through friends tapping friends and occasional offers to join in urban-lifestyle newsletters such as RareDaily. These fans drive growth by eagerly clicking refresh when new sales go up at noon Eastern. Seven dedicated followers tell Gilt's story — and proudly display their purchases.
Derivatives options associate
GUILTY OF: "Sometimes before I buy, I'll chat with friends and ask them for their opinion. On the Web site, you can copy and paste the image, so it's easy to send. It's just like shopping in a store."
SCORED: 7 for All Mankind straight-leg jeans
PAID: $109, originally $175 to $200
Stylist and personal shopper, Anthropologie
GUILTY OF: "I shop sample sales every day, since it's my job to know the industry. I get the Gilt alert on my BlackBerry at noon, and then I run to a computer — it's hard to view on my BlackBerry. I wish Gilt had a BlackBerry-friendly version."
SCORED: Twelfth Street by Cynthia Vincent black suede wedges
PAID: $68, originally $358
VP, foreign exchange trading, the Royal Bank of Scotland
GUILTY OF: "Every day I find something that I could or would buy, but obviously I need to maintain some discipline."
SCORED: Benjamin Bixby tuxedo blazer
PAID: $378, originally $1,395
Production assistant, Calvin Klein; contestant on reality show Stylista
GUILTY OF: "I play around a lot — I zoom in and look at the fabric, the texture, the color, and the details. They do a good job of blending up-and-coming designers with established ones."
SCORED: Galliano print wrap dress
PAID: $270, originally $500
Student, Fordham Law
GUILTY OF: "At 11:58, everyone [in school] tunes into Gilt and waits for the sale to start. We usually go, 'OMG, did you see what's on Gilt?' We help each other."
TEAMWORK: "My wife's going to buy a Kooba bag no matter what, so I might as well find one for $200 rather than $700."
SCORED: John Varvatos distressed boat shoes
PAID: $88, originally $225
Publicist, Sarah Hall Productions
GUILTY OF: Constantly refreshing the site if an item is unavailable (members have 10 minutes to mull over a purchase). "If I really want something, I'll spend the time to make sure I get it."
SCORED: Twelfth Street by Cynthia Vincent dress
PAID: $120, originally $295
Account executive, Citrix
GUILTY OF: "It's one of the six Web sites I go to every day."
TEAMWORK: "My husband had purses in his cart that I didn't get in mine."
SCORED: Kevia ring, $110, originally $240; Amrita Singh bangles, $38, originally $100; Lauren Merkin clutch, $98, originally $200