Why do flash sales of luxury goods at discount rates appeal to consumers?
Two reasons: urgency and scarcity. The goods are beautifully presented. And they’re curated. There’s a feeling of luxury, and consumers can get great deals very quickly.
Is the idea enduring?
The basic tenet of wanting great merchandise at a great price does not go away. Today the whole sector offline is $50B to $100B in revenue. Can 5 to 10% move online? Yes.
Did the recession help Gilt?
Our business grew dramatically in the 9 months before the recession. Then growth continued. There’s no recession in retailing. Now, 35% of what we sell is end-of-season merchandise.
How did you raise capital?
I’ve done 14 financing rounds in 5 years; I have multiple companies. I don’t use a banker. For Gilt, I talked to some logical people, presented the growth opportunity. We raised $138M. The lead was SoftBank in Japan.
Any plans for an IPO?
Eventually Gilt will go public. Not soon; maybe two years from now. I took DoubleClick public in 1998 when the idea was to go public quickly. Now, there’s more flexibility and the advantages of staying private are bigger.