By David Capece, Managing Partner
General Atlantic and Matrix Partners have invested $43 million in the Gilt Groupe, on the premise of making luxury and designer goods more affordable. Since launching in November 2007, Gilt membership has grown to 1.3 million registered users in the US, along with 200,000 in their fifth month in Japan. Gilt has created a business model that works in today’s luxury market, while many of the traditional luxury players struggle. They have tapped into a community of deal hounds in an exclusive way by taking advantage of the scarcity concept. As we covered earlier in our luxury trends, creating scarcity in today’s world of overcapacity is increasingly valuable. Gilt has done an outstanding job on this front.
Further, Gilt plans to extend its efforts through the launch of jetsetter.com (a travel site leveraging similar concepts) as well as Gilt Fuse which focuses on fashion for younger members. Again, Gilt is right on target through its appeal to an audience of influencers, especially our youth. In our interview with Trendsta’s CEO, Becki Heller, she said, “it’s good to be back in high school.” Gilt Fuse gives youth an outlet for expression by making high-end fashion accessible.
As entrepreneurs seek to raise money, their vision should be in-step with emerging trends. Gilt has done an exceptional job at sensing the pulse of the market and creating a unique and desirable offering.
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