Even before Susan Lyne left her high-profile CEO post at Martha Stewart Living Omnimedia (MSLO) earlier this year, the media world speculated wildly about where she might go next. Would she take a senior role at media giant Time Inc? Or would she end up in Hollywood, where she could bring to bear some of her experience from ABC, the American television network,whose fortunes she was credited with reviving on the strength of shows like Lost and Desperate Housewives?
It turned out that neither was true. In a surprise move, she accepted an offer to become the CEO of Gilt Groupe, an innovative start-up online fashion retailer that was featured on the Business of Fashion shortly after its inception late last year.
In our latest CEO Talk, I checked in with Susan to learn about the incredible progress of Gilt Groupe since then, which has seen the online start-up secure a $5m funding round from Matrix Partners, build a team of more than 100 employees from some of the best fashion brands and retailers, and most impressively, attract a passionate membership base that now numbers almost half a million users.
BoF: What attracted you to join a start-up like Gilt Groupe in the first place, and why now?
To be honest, I wasn’t looking to join a start-up. But Gilt Groupe isn’t your typical start-up. It took off almost immediately. Customers embraced it from the start -- they talked about it to friends, who told THEIR friends, and by the time I joined the company in September there were already hundreds of thousands of Gilt fanatics. It’s rare that you see a company with a great business model and such a passionate customer base. It was irresistible.
BoF: You're joining at a tough time for the wider economy. As the economic slowdown appears to be one that will be deep and protracted, and consumer spending is plummeting, what will Gilt Groupe be doing to sustain its high-growth momentum?
I started here a month before the market crash. This is a really tough economic climate to be building a young company, but the nature of our business protects us to some extent. Now more than ever, people are looking for value when they purchase something and we deliver that, every day, in every one of our sales.
I can’t tell you what our results would have been if the economy was in better shape, but we continue to see pretty stunning growth. Our weekly sale average was up 40% in October and up another 20% in November. We broke revenue records again last week.
But we’re not going to rely on pricing alone to keep that momentum. We’re very focused on making Gilt a fantastic shopping experience across the board — a well-edited assortment, beautifully presented; easy to use, great customer service, and FUN. People join Gilt because of our prices but they will keep coming back because it’s a great experience.
BoF: Following the lead of Vente Privée and Gilt Groupe, a plethora of private sale shopping sites have popped up in recent months on both sides of the Atlantic and major online luxury players like Net-a-Porter are getting into the off-price game. What makes Gilt Groupe different?
Any time a successful new business model emerges you’re going to see competition. We expect it. But we have a very strong base to build on. Our merchandising team has built strong relationships with most of the top brands. And Gilt itself has emerged as a brand, with a look and feel that’s entirely consistent with the brands we showcase. We keep an eye on the competition, but we’re much more focused on where we take the company next.
BoF: You've recently launched a menswear on Gilt Groupe. What have you found are the differences in serving male customers versus your female core?
We launched menswear over the summer and it’s already over 20% of our business. It’s interesting: initially we expected to see many more women buying for their husbands or boyfriend but the vast majority of our sales are men buying for themselves. One difference: if they see something they like, they buy two, or they buy it in every color! We recently launched Children and Home, as well.
BoF: Given your background in media, what elements from your experience at MSLO and Disney might we see reflected in Gilt Groupe going forward? Will there be more investment in original content development?
We will introduce content sparingly, really just in service of our sales. The content our members want is fairly specific: better sizing information, background on brands they’re not familiar with — anything that will help them make the right purchasing decision. My experience at at MSLO and at Disney taught me to listen to your customers and that’s exactly what we’re doing.
BoF: Now that Gilt Groupe has grown to more than 100 employees, what are you planning for subsequent rounds of funding, following the $5m cash injection by Matrix? Notwithstanding the current poor IPO conditions, could you foresee taking Gilt Groupe public one day?
We have all the funding we need at the moment -- Matrix has been a great partner. I wouldn’t rule out the possibility of raising more funds in the future but it would likely be for expansion of our business rather than current operations.
Gilt Groupe has provided a special link for Business of Fashion readers to join the Gilt Groupe community: www.gilt.com/
This interview is part of an ongoing series of discussions with fashion entrepreneurs and business leaders as they combat the economic downturn. Previous interviews are listed below:
- Natalie Massenet, Chairman and Founder, Net-a-Porter
- Camilla Skovgaard, Shoe designer and entrepreneur