14 May 2011

Combining Fashion and Finance: Interesting interview with Gilt Groupe CEO Kevin Ryan

Bloomberg Television conducted an interview the other day with Kevin Ryan, the CEO an co-founder of everyone's favourite flash sale shopping website, Gilt Groupe (well, not those of us in Canada, but that's another story...).  Gilt recently completed another (allegedly its final) round of financing, for $138 million.  The financing attaches a market value to Gilt Groupe of $1 billion; not bad for a company that is only three years old.  Although not yet profitable when taking all of its divisions into account, Gilt's revenue has grown steadily since its inception, and Ryan predicts gross revenue for the year ended June 30, 2011 between $400-500 million.  Gilt employs over 700 people across seven different verticals, including women's fashion, men's fashion, Gilt City (city-specific deal service a la Groupon), and Jetsetter (travel sales division).  More after the jump.

Ryan says the funding will be used to launch new verticals (one being a full-priced men's site, and one being a gourmet food site), to fund existing businesses (many of which are early in development and yet to be profitable) and to fund potential acquisitions.  This last point is the one that caught my attention, because for a long time now I have been predicting consolidation in the area of upper-tier online shopping, and this is exactly what Ryan predicts (particularly in the next 12 months). 

Despite this reportedly being the company's final round of financing, Ryan says there has been no meetings regarding taking Gilt public.  He does, however, see it happening sometime in the next 1-3 years.  What he doesn't see is any significant international expansion; he notes that Gilt is currently a leader in the United States and Japan (the only two countries in which it operates) and, at least for the next year or so, the company will focus on shoring up those markets.  A sound business strategy, sure, but that doesn't do much to relieve the sting those of us North of the border feel seeing the awesome selection that is just out of our reach.  Come on, Gilt, shipping to Canada can't be that problematic!

Here is the interview, courtesy Bloomberg via Gilt.

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