Earlier this month, Gilt Groupe CEO Kevin Ryan downplayed rumors that the New York-based company was undergoing a massive restructuring.

He said that nearly all of Gilt Groupe’s 900 employees and business units would remain intact, despite reports that painted a fairly grim picture of the situation.

Today, Ryan confirmed that the final tally ended up being from 80 to 90 people, and that John Auerbach, who headed Park & Bond, its men’s full-priced apparel site, and Nathan Richardson, who ran Gilt City, would both be leaving, after a transition period.

All of the cuts are designed to get the company to cash flow positive by the second quarter, and profitable by the fourth quarter, Ryan said.

Additionally, Ryan said that Richardson and Auerbach, who was Gilt’s fifth employee, are leaving because both are better suited for running start-ups.

“I will be their No. 1 reference,” he said.

An internal memo announcing the departures is expected to be sent around later this afternoon.

On Friday, the cuts focused on Gilt City, the company’s daily deals site that, despite its high-end focus, was competing head to head with others, such as Groupon, LivingSocial and the many other clones in the market.

Ryan said there will be a lot of consolidation in the daily deals space going forward, but that in certain markets it remains a good business for the company, including New York, which is its most profitable division.

“I think you’ll end up with a smaller group of companies. There will be a couple of high-end players, like ourselves and Bloomspot, and then there will be a couple of verticals, like restaurants or kids, and that’s it,” he said.

As part of Friday’s cuts, the company confirmed that it will no longer have offices in Seattle, Dallas and Atlanta. Additional offices it gained through the acquisition of BuyWithMe, including San Diego, Houston and Philadelphia, will also close.

Customers in those markets will receive national deals, but only local deals that are sourced through a centralized sales team. Going forward, Gilt will have offices in New York, San Francisco, Los Angeles, Boston, Chicago, Miami and Washington, D.C.

Earlier this month, Ryan had said he had only expected to lay off about 50 staffers, much less than the rumored 170.

On Friday, New York Magazine reported that more than 100 people were laid off, naming both Richardson and Auerbach as departing executives. It also reported that staffers, who once received a fridge full of snacks, would no longer have a daily supply of fruit, yogurt, cheese and Pellegrino water.

Over the past year, the company expanded quickly beyond its roots as a flash sales site, adding Park & Bond, Gilt City and Gilt Taste, a high-end grocery site. It continues to be in about seven businesses.

Some of the areas that were also restructured were the newer sites, like Gilt Taste and Park & Bond, which Ryan said took more resources to get up and running than it took to run on a day-to-day basis.

Gilt, which raised $138 million in capital last May, is on track for an IPO, perhaps as early as the fourth quarter, but more likely in 2013, Ryan added.

Ryan called AllThingsD this morning to clear the air after a report in BetaBeat painted a fairly grim picture of the situation.

BetaBeat reported this morning that as many as 170 employees would be laid off today; that Gilt Taste, the company’s high-end grocery site, was likely to be closed down; and that Jetsetter, its travel operations, was likely to be merged with Gilt City, its daily deal division.

On pretty much all accounts, Ryan declared not guilty.

“We are not closing down any businesses. We are not closing down Gilt Taste, and we aren’t merging Gilt City and Jetsetter,” he said.

Additionally, another new division, Park & Bond, which sells full-priced men’s clothing, is also doing well. “In its fifth month of business, Park & Bond did more revenue than any other business in its fifth month,” Ryan added.

The one grain of truth in all of it, he said, is that over the next couple of months, he expects to selectively trim staff by roughly 50 employees.

But for emphasis, he added, the company will still end up having more employees by the end of March than it does now.

“It’s pretty minimal in the scheme of having 900 employees,” he said. “Not only will we do that [have cutbacks], but we will continue to do that. What Gilt needs to be, and is doing, is to create a fantastic consumer experience while running an efficient company.”

He said the company achieved its goal of generating $500 million in June and now is setting its sights on transitioning the business from a money-losing organization to cash-flow break even this year.

He also said that Gilt Groupe, which raised $138 million in capital last May, is on track for an IPO, perhaps as early as the fourth quarter, but more likely in 2013.

“The timing feels about right, and we are on a steady progression,” said Ryan, who declined to give revenue estimates for this year because the company is in the sensitive lead-up to a public offering.

Ryan named two divisions that may see cuts over the next couple of months: Gilt Taste and Gilt City.

In October, Gilt City purchased BuyWithMe, and although it hired only 20-25 of the deal provider’s 190 employees, Ryan said they probably don’t need that many going forward now that the integration has been completed.

Additionally, he said there are some inefficiencies within Gilt Taste.

Ryan characterized the site as “doing great,” but said it will need fewer staffers now that it is up and running. At first, it needed to negotiate deals with dozens of vendors and shoot photos of the more than 1,000 products on the site.

Now that they’ve hit a baseline of items, they’ll probably add only a couple hundred new products a year, reducing the need for so much staff.

“There’s much less work to do there,” Ryan said. “With flash sales, you have to do that process every week, but in the full-priced business, there’s greater start-up costs. That’s part of the business.”

In particular, BetaBeat said Park & Bond President John Auerbach was likely to leave the company.

Ryan said there’s always the chance one of the top 15 executives could leave, whether it was their decision or the company’s, but that Auerbach is still working there as of now.

This will be the first time vente-privee, which translates to “private sale,” will enter a non-European market. The site is expected to launch late this year, and like its counterpart in France, will offer designer apparel at low prices for limited amounts of time to people who sign up for a membership.

Vente’s move to the U.S. was expected. The joint venture with American Express was not. One might even go as far as to call the match-up perplexing. (Maybe we should warn vente-privee now that American Express is a credit card-issuer and not some sort of patriotic speedy deliver service, like FedEx or UPS!)

As part of the agreement, the two will be equal partners. However, terms of the deal were not disclosed, such as the size of investment or the kinds of resources the companies would be required to contribute.

To be sure, vente was wise to enter into a partnership for its North American debut. It’s the American Express part that’s easy to get hung up on.

Despite vente-privee being more than a decade-old and well established in Europe, it will be walking down an already crowded catwalk. Many start-ups here have done a good job imitating vente’s model and making it its own. Perhaps its closest competitor is Gilt Groupe of New York, which just raised $138 million. Also a contender is ideeli, which just lined its pockets with $40 million in cash. Others with offerings include Amazon and Nordstrom.

Earlier this week, Gilt’s CEO Kevin Ryan downplayed the significance of vente’s impending entrance in an interview with me (like a model would diss another model’s photo shoot).

“There’s only one player in the world to watch,” he said. “But if you weren’t covering this business, you would have asked ‘Who? I never even heard of them.’ That’s the reality, and for them to enter, they’ll have to set up warehouses and sign up members. Basically, you are a start-up…I don’t worry about international players, even ones that are bigger than we are.”

American Express presumably won’t be able to help vente with warehouse space, but the two claim to have a few synergies. In a press release, American Express Enterprise Growth President Dan Schulman said that both brands have a heritage in the luxury market and place a high premium on delivering quality customer service.

Schulman has been busy heading up American Express’s two-month-old digital payments platform, as of recently. He characterized the joint venture as helping the company reach a new audience. Earlier this week, American Express started working with SCVNGR’s LevelUp app to help redeem coupons at a few Levi’s stores.

Founder Jacques-Antoine Granjon didn’t reveal anything more in his statement, either: “The brands where we have strong relationships are excited about extending their offerings into the U.S. market through this joint venture. There is no question that American Express was our partner of choice. As leaders in B2B and B2C market approaches, we will now combine our skill sets to deliver experiences that are unmatched in the U.S. market.”

For more on the financing, including Softbank’s role in the deal, read the details here. Otherwise, continue reading below for excerpts from our chat.

When Ryan first started the company almost four years ago today, it focused on selling woman’s clothing and accessories to members who signed up for a daily email. Now Gilt, which targets affluent young professionals, has expanded into men’s apparel, travel, children’s items and home decor. In a matter of months, it will launch two new verticals: gourmet food and full-priced men’s clothing.

So, $138 million is a lot of money. Is an IPO next?

“It will be great not to have to do this [fundraising] for a long time. This will be the last time the company raises a private round. [We'll be seeking an initial public offering] at some point, but we have no specific plans. It’s not happening any time soon, but that would be the next step.”

Why have you picked gourmet food and men’s full-priced apparel as your next two verticals?

We already announced that the men’s full-priced site was coming this summer. That’s a full store going head to head with department stores. It’s not Gilt-branded…It’s not flash sales, it’s full price, and in the next month or two, we’ll be launching our gourmet food business, where food is sent in the mail. It’s also full price, not discounted.

To find out what vertical we’ll do next, we generally do ten sales on the site and see how it works. We did a lot of men’s full-priced sales and they went very well. We’ve had a lot of pet sales, and they haven’t done as well. We try lots of things…Any of these could be set up as a new category.

What do you have in mind for acquisitions?

We’ve done two so far: Decorati and Bergine, and we have nothing specific in mind. But over time there will be a lot of consolidation in this space. For instance, if we were going to enter the art space, I would look at doing an acquisition, where there’s three to four players who have established a fair amount of expertise and relationships with galleries. There’s hundreds of sites. So many have entered this space, and they aren’t going to make it. We get approached every day by two to three about a potential acquisition.

What do you think of Amazon’s new flash sales site called MyHabit?

The site looks pretty good. We’ll see. They’ve had trouble in the past when they launched Endless to go after Zappos. It’s hard when you have lots of priorities. If you asked me who do you think will do better, eBay or Amazon, I think Amazon. Amazon has gotten better out the gate and will do a better job.

What about new competition, coming from international players entering the U.S.?

There’s only one player in the world to watch. Reports say Vente Privée will enter in the next next nine months. But if you weren’t covering this business, you would have asked “Who? I never even heard of them.” That’s the reality, and for them to enter, they’ll have to set up warehouses and sign up members. Basically, you are a start-up…I don’t worry about international players, even ones that are bigger than we are.

Same goes for Gilt if you enter a new market. You’ll have to start from scratch, too, right?

It’s not at the top of our list right now. The reason I went to Japan is that after three months, I asked, “Are there any large countries where no one is doing this?” That’s an opportunity you don’t want to miss. If I’d entered now and was the fourth player, there wouldn’t be anything compelling there. There’s an advantage to being the first player. Over the next six months, you won’t see any activity there. We’ll be focused more on verticals.

How many verticals will you go in?

Not tons, but every year we’ll enter one or two for the next one or two years. I don’t want to be in 100 verticals. I want to be in the big ones that make sense.

Where are you seeing the most growth right now?

It’s not very revealing. We are always seeing the most growth in our newest verticals. In terms of the largest, first women’s, then men, then Jetsetter, and then the other four.

In general, what do you think of the daily deals/group-buying/discount/sales business? Is it here to stay?

Yes. All you have to do is step back and ask how big is T.J. Maxx or Ross? You are talking about a $50 billion sector offline. It’s not a stretch to believe that some of that will move online. Duh, of course it will.

The fact that it’s flash sales doesn’t matter. If you walked into T.J. Maxx, you might see something that you won’t see a week later. They don’t call it a flash sale, but that is what it is. It’s a shift online. All you have to believe is that of the $50 billion-plus business, five percent will move online. That’s not ridiculous and that’s $2.5 billion.

What has surprised you about the business?

I thought the majority of our sales would come from outside New York, where people have access to sample sales all the time. But I was really wrong. It turns out that New York is by far our biggest market. People may be working only two blocks away, but they are busy. They are partners at Goldman Sachs. They don’t have time to go stand in line, but they can sneak online for five minutes.

Participants in the fifth round include the Japanese-based telecom conglomerate Softbank Group as well as Gilt’s previous investors, General Atlantic and Matrix Partners. Other new investors include: Goldman Sachs, New Enterprise Associates, Draper Fisher Jurvetson Growth, Pinnacle Ventures, TriplePoint Capital and Eastward Capital.

Softbank’s involvement is two-fold.

Not only will it be contributing $62.5 million of the round, which will all be going toward Gilt’s U.S. operations, it will also invest a smaller undisclosed amount into Gilt Groupe Japan. The two companies will each own 50 percent of the joint venture.

In all, Gilt has raised $240 million. The fifth round values the company at roughly $1 billion before the round is taken into account. The round was first reported in a regulatory filing last week.

Gilt’s CEO Kevin Ryan, who is known for being one of the first 20 employees at DoubleClick, launched the members-only site in November 2007. In roughly four years, the company has created a name for itself as the online destination for discounts on brand-name luxury items. Targeting affluent young professionals, the site lures consumers in with beautiful photography and creates a sense of urgency because the deals are gone once the inventory sells out.

In addition to selling men’s and women’s apparel, it has branched out into new markets, such as children and home decor. It has expanded into travel and local deals through its Jetsetter and Gilt City brands respectively. [Read our Q&A with Ryan here.]

The funding will go toward launching new verticals and making acquisitions to get into new markets. In the next couple of months, Gilt has committed to launching a gourmet food site and a full-priced men’s online retail apparel site, but others are also on their way.

Ryan said the round ended up being bigger than they expected and they could have easily raised up to $200 million. But there’s a delicate balancing act between raising enough and diluting the company too far.

“It will be great not to have to do this for a long time,” he said, adding that this will be the last time the company raises a private round.

The next step will be an initial public offering. ”At some point, but we have no specific plans. It’s not happening any time soon,” he said.

Softbank, which operates wireless and broadband networks in Japan and has investments in hundreds of companies–including Yahoo! Japan–will contribute other services and intangible property to help expand what Gilt has already started in Japan.

“It’s not that it wasn’t going well. We are the flash-sales leader in Japan, but when we started talking to them, it was clear that they would add value,” Ryan said. “We don’t need a partner, but we were convinced that they would add value and be a great partner. We are a leader, but we want to be a lot bigger and it’s sometimes hard to be as successful in Japan without a partner. I think that will help.”

To be sure, the round will be helpful in establishing Gilt from among the copycats flooding the market.

The company previously said its revenues would total up to $500 million for the fiscal year ending June 2011. Ryan would not provide an update on that figure, but said the overall company, which has 670 employees and 100 job openings, is not yet profitable.

Its business model is not too dissimilar to well-funded Groupon or LivingSocial. Other direct competitors, such as Rue La La and HauteLook, have recently been acquired by eBay and Nordstrom respectively. And in the past couple of weeks, one of its closest competitors, ideeli, raised $40 million in capital. E-commerce giant Amazon just began another direct competitor called MyHabit. Additionally, Vente Privée, the big French flash-sales site, which already has billions in revenues, is reportedly launching in the U.S. in the coming months with an announcement slated for this week.

Here’s the full press release:

Gilt Groupe, Inc. Announces $138 Million in New Funding
Accelerates Business in Japan with Establishment of Joint Venture with SOFTBANK

NEW YORK, NY, May 9, 2011 – Gilt Groupe, Inc., an innovative online shopping destination, today announced it has raised $138 million from new and current investors. The new financing will be used for various growth initiatives, including acquisitions, new business categories Gilt plans to launch, as well as the acceleration of growth in existing categories and geographies.

Participants in the financing round include SOFTBANK Group; Gilt Groupe’s previous investors, General Atlantic and Matrix Partners; as well as a syndicate of new investors including Goldman Sachs, New Enterprise Associates, Draper Fisher Jurvetson Growth, Pinnacle Ventures, TriplePoint Capital and Eastward Capital.

SOFTBANK Group, a Japanese telecommunications, internet and media conglomerate, has invested $62.5 million into Gilt Groupe. In addition to that investment, SOFTBANK Group has made additional contributions into Gilt Groupe Japan, of cash, services, and intangible property to establish a joint venture between the two companies, representing a 50% stake for SOFTBANK Group in that business. The other partners invested a total of $75.5 million into Gilt Groupe in the US.

“We are very excited about each of the partners we’ve chosen and the opportunities this financing creates as we continue to expand into additional categories as well as make strategic acquisitions to complement existing business lines,” said Kevin Ryan, Founder and CEO, Gilt Groupe, Inc.

In the next several months Gilt will launch a gourmet food site as well as a full-price men’s online retail store as the Company continues to expand beyond its original business of off-price apparel and accessories through the flash sales model. In November 2007, Gilt Groupe launched as an invitation-only site for coveted women’s apparel and accessories. Today, Gilt Groupe has added business lines in home (Gilt Home); children (Gilt Children); men’s apparel and gear (Gilt MAN); vacation travel (Jetsetter); local services and experiences (Gilt City), and has founded the leading flash-sale site in Japan (Gilt Groupe Japan).

“I am very excited to see further expansion of Gilt’s offerings to Japanese customers,” said Masayoshi Son, Chairman and CEO of SOFTBANK Group. “With our Internet technology and Gilt’s innovative service, we look forward to working together to bring the Japanese market to a new stage of online shopping.”

”In just a short amount of time Gilt has successfully brought the flash sale model to Japan as well as introduced local city experiences through the launch of Gilt City Japan,” said Peter Glusker, CEO, Gilt Groupe Japan. “This newly formed joint venture with SOFTBANK will allow us to expand our offerings in Japan at a faster rate as well as benefit from SOFTBANK’s unique set of assets and expertise in Japan.”

To date Gilt has secured over $270 million in total financing since establishing operations in November 2007.

About Gilt Groupe, Inc.

Gilt Groupe, www.gilt.com, is an innovative online shopping destination offering its million members special access to the most inspiring merchandise and experiences every day, many at insider prices. Gilt continually searches the world for the most coveted brands, including fashion for women, men and children, home décor, hotels and travel experiences on every continent, and unique activities in a growing list of cities and destinations. We believe that every day is an opportunity to inspire and be inspired.

Gilt Groupe Japan, www.gilt.jp, was launched in March 2009, and has established itself as the leading flash-sales site in Japan with over 600,000 members.

Gilt Groupe, the earliest and best known of the U.S. “private sale” shopping sites, has a new boss: Founder Kevin Ryan, who previously served as the company’s chairman, is now running the company.

Susan Lyne, brought in as CEO two years ago from Martha Stewart Living Omnimedia (MSO), has been moved into Ryan’s old chairman slot.

Gilt Groupe, which is touted as a likely IPO candidate, says it will see gross revenues of $400 million to $500 million this year.

(Full disclosure: I worked for Ryan for a year at Silicon Alley Insider.)

Here is a video interview that BoomTown’s Kara Swisher just did with Lyne at Gilt’s offices in New York’s Manhattan:

]]> http://allthingsd.com/20100927/gilt-groupe-returns-its-ceo-kevin-ryan-susan-lyne-swap-places/feed/ 1 http://allthingsd.com/20100511/are-mobile-ads-the-next-big-thing-maybe-not/ http://allthingsd.com/20100511/are-mobile-ads-the-next-big-thing-maybe-not/#comments Tue, 11 May 2010 07:03:21 +0000 Jennifer Valentino-DeVries http://voices.allthingsd.com/?p=24894 A lot of buzz among online advertising companies these days is focused on mobile ads delivered to smart phones. Google (GOOG) executives have even talked about becoming a “mobile first” company, and Apple (AAPL) and Google have both made recent moves into mobile advertising.

But Kevin Ryan, the former CEO of online-ad company DoubleClick, said he doesn’t see mobile advertising delivering on those promises soon. Mr. Ryan, who left DoubleClick in 2005 and is the founder and chairman of high-end retailer Gilt Groupe, said that he has long been asked about mobile advertising and that “the real answer” is that he doesn’t think mobile is going to be as big as people think–although he learned very quickly that “the answer that people want to hear is that mobile is going to be huge.”

Read the rest of this post on the original site

]]> http://allthingsd.com/20100511/are-mobile-ads-the-next-big-thing-maybe-not/feed/ 0 http://allthingsd.com/20100416/retailer-gilt-sees-ipad-app-driving-fashion-sales/ http://allthingsd.com/20100416/retailer-gilt-sees-ipad-app-driving-fashion-sales/#comments Fri, 16 Apr 2010 10:00:22 +0000 Rachel Dodes http://voices.allthingsd.com/?p=23975 Executives at Gilt Groupe, the fashion retailer known for its online-only sales of high-end items, had expected to do well with their iPad app, but they were surprised by some of the results after the device was introduced.

On April 4, a day after the device debuted, 2.4 percent of Gilt’s sales came from the iPad, a higher portion than expected, said Gilt founder and chairman Kevin Ryan and Chief Executive Susan Lyne in an interview. The company also said that although women comprise its core constituency, iPad users seem to be mostly men. Within the first 10 days, sales of men’s products drove 63 percent of iPad-generated revenue, the company said.

The free “Gilt for iPad” app, one of five that were highlighted in Apple’s (AAPL) app store, has high-resolution images of products with “pinch and zoom” technology, quick navigation, and an easy shopping cart drag-and-drop feature.

Read the rest of this post on the original site

]]> http://allthingsd.com/20100416/retailer-gilt-sees-ipad-app-driving-fashion-sales/feed/ 0 http://allthingsd.com/20080716/alleycorps-kevin-ryan-speaks/ http://allthingsd.com/20080716/alleycorps-kevin-ryan-speaks/#comments Wed, 16 Jul 2008 21:11:38 +0000 Kara Swisher http://kara.allthingsd.com/?p=2359

With the sale of paidContent to the Guardian Media Group and the talks TechCrunch has been in with AOL, there certainly is a lot of hubbub around tech blogging sites of late.

One of the more interesting sites that has gone up over the last year is Silicon Alley Insider, which is headlined by former Internet analyst Henry Blodget (yes, that Henry Blodget).

But featuring Blodget’s speedy analysis of big trends, and news about Web and media players, with a sprinkling of reporting from its small team of writers, it’s been a sharp entrant into the sector.

Perhaps most compelling is that the site is backed by Web 1.0 entrepreneur Kevin Ryan, former CEO of DoubleClick (GOOG), who has nested SAI inside a network of new Web efforts at AlleyCorp.

Ryan founded what is essentially a Web 2.0 version of an incubator with former DoubleClick CTO Dwight Merriman.

While one can debate DoubleClick’s ads-in-your-digital-face strategy over its growth (it is now a division of Google), there is no question Ryan’s aggressive early efforts set the stage for the commercialization of the Web that continues today.

Now Ryan is trying to do the same for Web content on SAI. It just got a new small slug of funding; Blodget is also adding two new business sites to the mix.

What AlleyCorp all means is a bit eclectic. Ryan’s network of affiliated sites includes the content delivery network Panther Express, the 10gen apps development platform, a shopping engine called ShopWiki, the Music Nation independent music community and an online invitation-only, high-fashion sample sale site called Gilt Groupe.

Although SAI has a high profile, Gilt is perhaps the most intriguing of AlleyCorp’s sites since it is essentially an American copy of a highly successful European version.

Using the Web’s speed and the allure of an exclusive, limited sale of designer clothes, along with an Amazon-like shipping system, is perhaps the perfect mix of offline and online. It also has to potential to move into other e-commerce categories.

Here’s my video interview with Ryan about all this and more:

[ See post to watch video ]

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