With the acquisition, Gilt will be opening brick and mortar departments at at Off 5th (Saks Fifth Avenue’s “outlet” locations) stores and thus, loses its identity. Why? Because Gilt’s philosophy is centred around e-commerce, offering designer fashion, accessories and more at up to 70% of retail price for a limited of time (i.e. items will disappear from the site – whether or not it is sold out – after a few days). Brands I’ve seen on Gilt include “contemporary” designers like Diane von Furstenberg, Nanette Lepore and premium denim lines (Citizens for Humanity, 7 for All Mankind) to premium designers such as Narcisco Rodgriguez, Zac Posen and Balenciaga. Items can be around $75 US upwards to four figures, even at discount.
Gilt-branded swag at its Canadian launch party in 2011
When Gilt launched in 2007, it was something unique, a pioneer of sorts – there weren’t many of its kind back then, only regular online stores. How will Gilt still be Gilt when shoppers can touch the items? And how will it be “flash sale?” Will they have certain brands on display for three days, then put them away and replace them with something else? That seems like a great deal of work for staff. Besides, are Gilt’s offerings and price points ALL THAT DIFFERENT from other sections at Off 5th? While the website will still exist (at least for now), will it still be the “same thing?” Of course, Off 5th is not necessarily accessible. They’re generally located in suburban malls, often outlets, and requires longer drives for those of us who live in the city (the closest Off 5th to me will be opening at Vaughan Mills, which is a good 40 minutes by car, depending on traffic). And whether they’re going to launch at Canadian Off 5th stores is still undetermined.
I understand that this is a business decision, and since 2007, many more off-price stores have launched (and died). However, being a pioneer in the industry, I would have thought they’d keep it online only – it’s completely unnecessary to have brick and mortar sections, even if they’re part of a larger company. Intermix, for example, was acquired by Gap Inc. a few years ago, but maintains a completely separate website, unlike Banana Republic and Old Navy, which shares a check-out section with Gap. What is also interesting is this: Gilt was once valued at $1 billion but Hudson’s Bay bought it for $250 M – fairly discounted, just like the e-commerce site’s items.
The deal is set to close on February 1.
