Gilt Groupe’s Stiff Competition

Gilt Groupe may be sweeping the members-only sale market, but the competition isn’t giving up without a fight. In fact, similarly structured flash-sale fashion sites are beefing up their infrastructure and looking to intrude on the vast and extremely lucrative territory Gilt Groupe has dominated this past year. Haute Look, for one, has just announced a 31 million-dollar expansion (courtesy of investments from Insight Venture Partners). “Gilt Groupe has been the reigning outlet of choice for the high-fashion crowd (think partnerships with Vogue), but now HauteLook (think partnerships with People’s StyleWatch) has just received the kind of funding that can make it a major player in the world of internet sale sites,” says Daily Front Row. So, what’s next? For starters, Haute Look will be offering deals on gourmet food and wine as well as “services and experiences” (read: spa trips, wine tastings, etc.). They’re also throwing a lot of energy into revamping their men’s section, which includes hiring “Tim Davis, who spent 17 years at Neiman Marcus.”

Speaking of key hires, Ideeli.com, a major Gilt Groupe competitor, has also put quite a bit of funding and focus into assembling a more impressive masthead. Ideeli.com, which just hit its 3-year-anniversary, landed several recent hires whose collective resume includes stints holding “senior-level posts at Urban Outfitters Inc., ASmallWorld.net, and Overstock.com,” says Women’s Wear Daily. Beginning Saturday, the site will implement aesthetic changes too, like incorporating Polaroids into its images alongside with more glossy, mag-appropriate shots. “Of the leading four members-only shopping sites, a group that also includes HauteLook, Rue La La and Gilt Groupe, Ideeli saw the highest rate of growth in unique visitors, according to Comscore data” for this past year, adds WWD. Meaning, the battle of the flash sale sites is far from over.

Net-A-Porter Sells for £350 million

Net-A-Porter.com was arguably one of the first online retailers to hawk high-end designer goods to an international clientele. Its model has proved wildly potent. Countless brands have exerted efforts to mimic Net-A-Porter’s approach, which likewise includes original editorial content. And for good reason: the UK-based brand just sold for approximately $533 million to Richemont–the parent company of luxury brands such as Cartier and Chloe. “Natalie Massenet, who founded Net-a-Porter in 2000, [alone] is estimated to pocket £50 million (approx. $76 million) with the sale of her 18 percent stake in the company,” says Fashionologie.

While the sale will surely bring some changes to the virtual retailer, fans of the site can rest assured Massenet will maintain her executive post (not to mention invest £15 million from the sale back into her company). “Mark Sebba, Net-a-Porter’s chief executive, is also said to be staying on,” says Fashionologie. News has it with the sale will come expansions into Southeast Asia that will surely be exceptionally lucrative for Net-A-Porter. But, there is some skepticism afloat: apparently critics are concerned that the sale may be a catalyst that causes certain luxury brands to pull their stock from Net-A-Porter’s racks says the Financial Times.

Regardless, the sale marks a monumental point in online retail’s evolution. Given the success of the Net-A-Porters and Gilt Groupes of the world, expect the landscape of virtual shops to become increasingly cluttered. Standout retailers like the aforementioned sites will continue to hold prominence over an increasingly proliferated market. But as the economy continues to strengthen, there will surely be a newfound flood of aspiring shopkeepers looking to cash in on the burgeoning vertical.