An interview with HauteLook co-founder, Adam Bernhard, explaining his take on the liquidation flash sale model. HauteLook was sold this year to Nordstrom for $270 million
Whilst European sites like Vente-privée are largely credited as pioneers of the flash sale revolution, what the US market lost in time, they have made up in volume. Most adapt the liquidation-focused, members-only model, as explained by HauteLook’s Adam Bernhard above, but more and more entrepreneurs are bringing in elements of gaming, social media and search technology, to offer consumers a more interactive, exciting and relevant shopping experience.
Here we provide an comprehensive round up of key flash sales sites for luxury goods within the Americas. For a complete listing of sites from around the globe, we invite you to explore the Luxury Society directory.
Founded by Montreal based Yona Shtern and Robert Gold, Beyond the Rack is a private online shopping club for flash sales. In 2009, the business employed 50 employees and had 500,000 online members, in 2011 there were 240 employees and nearly 3 million members. Since 2010, the business has received $17 million in unattributed funding and signed agreements with TheTopSecret.com and RowNine.com, to absorb and serve members on the Beyond the Rack platform.
Founded in March 2009, Brazilian private sales site Brandsclub now operates in Brazil and Mexico. In 2010 the business raised $17 million in funding from South African media conglomerate Naspers and European fund Trayas. The site is thought to have almost 2 million members across its two geographical markets, with plans to expand in other areas of Latin America.
After witnessing the success of private-sale sites in his home country of France, Michael Meerzoumen came to New York to start Editor’s Closet. In 2008 the business hosted the first-ever automobile event through a sample sale website, with a number of 2008 Hummer H2s and H3s available.
Gilt Groupe was launched in the US in 2007, by Doubleclick co-founder Kevin P. Ryan, early eBay executive Alexis Maybank and Louis Vuitton and Bulgari merchandising executive Alexandra Wilkis Wilson, launching in Japan in 2009. The privately held company was most recently valued at $1 billion, receiving a total of $236 million worth of funding since 2007.
Launched in Los Angeles in 2007, HauteLook was founded by self-described ‘serial entrepreneur’ Adam Bernhard, alongside Konstantin Glasmacher and Brett Markinson. The business raised a total of $41 million in round Series B & C funding in 2009/2010, backed predominantly by Insight Venture Partners. In February 2011, the business was acquired by US department store Nordstrom, for $270 million.
HiPXiK is a subsidiary of Digital Luxury, the first e-business platform focused in Fashion and Lifestyle for Latin America. Digital Luxury has headquarters in Lisbon, Portugal, and offices in Sao Paulo, Brazil and Mexico City, Mexico. HiPXiK.com was launched in 2008 and is the largest ‘private sales” or flash sales shopping club in the Mexico. The business was started with seed funding and received Series A funding in 2010, however amounts were not disclosed.
Launched in March 2010, Ivory Trunk was founded to improve the flash sale site offering by including a price guarantee, free same day shipping and the ability for customers to return products within 30 days without reason. The website hosts one flash sale each weekday with a focus on high-end accessories like handbags, watches, and sunglasses.
A more niche-focused version of the flash model, LuxGoddess.com, offers users the ability to create a customised shopping profile, with brand and size preferences, where the site then searches the web for the best deals. Offers are displayed on a personal “Sale Rack”, further subsidised by a partnership with CouponCabin.com, that gives LuxGoddess users even further discounts.
Founded in New York in 2009, by former fashion executives Adam Leining and Pialy Aditya, Mintbox provides invitation only access to exclusive discounts, events and experiences at luxury retailers. Offers are extended both in-store and online, where registered members of Mintbox receive unlimited 5% back on all purchases through the Mintbox service.
One Kings Lane is a private online sales destination specialising in designer décor, furniture, accessories and gifts, founded by Ali Pincus and Susan Feldman, initially funded by angel investor Reid Hoffman. Since its launch in 2009, One Kings Lane has raised over $23 million and acquired publishing design firm Helicopter in 2011, to bring “design and content capabilities” to the online retailer.
RueLaLa.com was launched by Boston based Retail Convergence Inc, in 2008, backed with a $25 million funding round. The corporation also acquired off-price website operator SmartBargains Inc, which it then sold with RueLaLa to GSI Commerce in 2009 for $180 million, Most recently, GSI Commerce announced a $2.4 billion merger deal with eBay, where RueLaLa was spun off with other GSI businesses into a newly formed holding company and allocated further investment.
Self described as ‘part game, part shopping’, ToVieFor incorporates the flash sale model and online auction model, where members can either purchase an item – similar to eBay’s Buy It Now function – or place their highest bid to see if they win. The business was started by Melanie Moore, Eric Jennings and Susanne Greenfield, with a $75,000 grant, as part of the NYU Stern Business Plan Competition in 2010. They have since raised $18,000 in second round seed funding, from TechStars.
For more in our series of Prime Listings, including the last in our series of Online Private Sale and Discount Sites, please see our most recent editions as follows: