Imran Amed speaks to Alexis Maybank and Alexandra Wilkis Wilson, co-founders of Gilt Groupe, the start-up that is taking that fashion industry by storm.
NEW YORK – To walk into the offices of Gilt Groupe, the New York-based online fashion start-up, is to go back in time, from the depths of today’s challenging economic environment to the heady days of the dotcom boom of the late 1990s, when optimism and technological innovation reined supreme.
From the minute I walk in, things feel distinctly different from the empty stores and empty desks in offices elsewhere in the city. The company’s small reception area is filled with prospective employees filling out application forms. With all the conference rooms occupied, interviews for new employees are conducted wherever space can be found. The 125-strong team sits in an open-plan environment, which during the start of its daily sales of overstock fashion products at 12 noon, seems more like a commodities trading floor than a fashion company, complete with a live screen to track the sales made to Gilt’s ever-growing membership base across the United States, now numbering more than one million people.
At the core of the Gilt Groupe phenomenon are two college friends who saw a market opportunity and seized it. Luxury Society members Alexis Maybank and Alexandra Wilkis Wilson co-founded the company based on the simple concept of taking fashion sample sales online. But of course, ideas are a dime a dozen, and Gilt Groupe is further evidence that what counts for everything is execution.
Gilt Groupe’s performance since its launch in November 2007 is nothing less than staggering. Gilt.com had 40 percent more unique visitors in March 2009 than February 2009, and 500 percent more than March 2008. The company has averaged 25 percent month–over-month revenue growth in FY 2009, now selling more in a week than was sold in the entire first quarter of 2008.
The Gilt business shows much promise for a profitable future because of virtually flawless execution enabled by brilliant team building as well as a touch of excellent timing that has allowed the young company to capitalise on shifting consumer values and priorities in these turbulent economic times. With excess stock piling up in the backrooms of fashion brands, Gilt also provides the perfect avenue for brands to liquidate excess stock in a safe online environment, just when sales are drying up elsewhere.
The dynamic duo of Alexis and Alexandra are the first to credit their explosive growth to an ever-expanding team of complementary experts who round out their own skill sets. In particular, the young company has drawn on talent from big-name luxury companies to fuel its growth. But, no pure fashion start-up, Gilt has a strong technological bent as well. Chief Technology Officer, Mike Bryzek, has been on board from the start and Kevin Ryan, former CEO of DoubleClick, serves as Gilt Groupe’s Chairman.
Alexis and Alexandra recently welcomed me into Gilt’s buzzing New York offices in order to share their inspiring story with fellow members of the Luxury Society community and shed some light on entrepreneurship from the heart of Gilt Groupe’s viral explosion.
IA: Can you tell me about the genesis of Gilt Groupe?
Alexandra: Alexis and I met while attending Harvard for our undergraduate degrees and we were also classmates at Harvard when we pursued our MBAs. For years, we often discussed that we would like to create a business together, we were just unsure what it would be and when we would launch.
Years later, after graduate school, we decided we were ready to bring our complementary fashion/e-commerce skills together in the form of a business. Alexis came from the e-commerce world, being one of the early employees at eBay (during her 4 year run there, she witnessed its growth from 40 employees to about 5,000), while I came from the luxury fashion world with retail experiences at Louis Vuitton and Bulgari.
We would frequently meet each other in NYC and attend sample sales together during which we would receive numerous calls from family and friends instructing us on items they would like for us to buy on their behalf. It seemed natural to us that the sample sale business model had strong potential to work online nationwide and our skill sets and drive were ideally suited. Gilt Groupe was launched on November 13th 2007.
IA: What was the elevator pitch that you used to sell your idea?
Alexis: Gilt Groupe provides access, by invitation only, to Men’s, Women’s and Children’s coveted fashion and luxury brands at prices up to 70% off retail. Each sale lasts 36 hours and features hand-selected styles from a single designer. All sales take place at 12pm EST, only exclusively on our website, and our full collection of merchandise is always available at the start of the sale.
IA: Once you had the concept in mind, what were your biggest priorities in the early days after having set up the business?
Alexandra: When we launched Gilt Groupe I was primarily concerned with putting together a highly coveted merchandising mix that would be compelling to online consumers. Fortunately, I had strong relationships with designers and brand CEOs who trusted us to sell their products on our site. Alexis and I did not have any trouble getting all our friends to join Gilt as members and to help us spread the word. Hiring was very important to us and we worked hard to hire the best and brightest people who could thrive in our entrepreneurial environment.
IA: Tell us about the decision to bring in a full-time CEO and how that has changed your roles in the business?
Alexis: Susan Lyne brought a strong understanding of how to build lasting consumer brands through her work at Martha Stewart. When she left, Nick Beim, our investor from Matrix, reached out to her to see if she was interested in getting involved in the company. We were thrilled to recruit her and have since focused on being more outward facing and on the development of new Gilt businesses.
IA: How has your business fared in the economic downturn?
Alexis: Given the availability of excess opportunity and the uptick in consumers looking to get greater value when shopping, we have had all our record days and weeks over the past 6 months.
IA: What is the hardest part of being an entrepreneur today?
Alexandra: Being an entrepreneur is exciting. I love that no two days at Gilt are alike and it seems impossible to become bored. However, there certainly can be challenges when a company experiences hyper-growth. Alexis and I are working hard to maintain our company’s flat, collaborative culture, but when headcount doubles and triples so frequently, that can be challenging because decisions do need to be made frequently and not everyone will always be able to weigh in their opinions.
IA: For each of you, what is the biggest lesson you have learned?
Alexis: To always be flexible and resilient.
Alexandra: I have learned to listen to my gut instinct.
Imran Amed is Editor-in-Chief of Luxury Society