Susan Lyne was already a well-known executive with several successful gigs behind her when she took over control of Gilt Groupe in 2008, shepherding it to what many Wall Street analysts say will be the most anxiously anticipated IPO in 2013.
Lyne was one of the ABC executives that produced Desperate Housewives; and when Martha Stewart was jailed for insider trading, Lyne was appointed to run Stewart’s design empire. Today, as the CEO of Gilt Groupe, Lyne says, “People tag me by the sleeve and tell me it’s changed their lives. They tell me their stories of how at 12:01 p.m. everyday life just stops for them. It’s like a religion, that deep. I’ve never seen anything like this.”
Gilt Groupe is the second most valuable e-commerce company with its own inventory in the world. With a value of $1 billion, only the much larger Amazon is bigger. Back in 2007 Gilt began with its five founders in a sublet office. Today it boasts 900 employees and a fashionable loft on Park Avenue. Gilt has 5 million members and sends out 10,000 packages each day. The company has also expanded vertically with such cousin e-commerce companies as Gilt Kids, Gilt Home, the men’s site Park and Bond, Jetsetter, Gilt Taste for gourmet foods, and Gilt City, which competes with Groupon. And what separates Gilt from many other online merchants on their way to an IPO, Gilt expects to break even by the end of the year.
This is how Gilt’s highly popular “flash sale” works: At 12:01pm Eastern Standard Time, thousands of people, the majority women, sign in to gilt.com. Whether they are at work, at home, in their cars or at a restaurant, they begin to scramble on-line for a limited selection of hugely discounted designer items, maybe one or two pieces in each size. Within one minute it is all over. The winners feel great, the losers disappointed, but there is always tomorrow for another go.
Dawn Olmstead is a Hollywood producer who first heard of Gilt back in 2007, when to become a member someone had to recommend you. (That rule no longer exists.)
“It’s magical,” says Olmstead. “When you win, it’s fantastic, and even when you lose, the site is your guidepost. You see what went fast, and you know that’s what’s hot. It’s better than Vogue. It’s better than anything.”
Olmstead may even read the inspirational business book, By Invitation Only: How We Built Gilt and Change the Way Millions Shop. Written by Alexandra Wilkis Wilson and Alexis Maybank; the two are friends from Harvard Business School, and were brought on board Gilt early by Kevin Ryan, the founding partner and CEO, to create the way the site looks and feels, and to be the perfect poster girls for Gilt.
Gilt’s longer-term plans are to eventually be a platform for luxury, designer merchandise-don’t tell anyone- at full price.
“We want to be looked at mainly for curation,” Ryan says, “for direction and taste, not just a bargain.”