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Gilt popularized a whole new category of online retail when it launched in 2007. It paved the way for a large pack of companies trying to cash in on the flash sale model based on Vente-Privée success in France, and it was arguably doing it better than anyone else. Now Gilt is struggling to stay afloat, as detailed in a new report from Business Insider. What was once a booming retail sector is failing fast: Vente-Privée shut down its US operations last year, and New York Times fashion critic Vanessa Friedman speculates that flash sale sites might not be around for much longer.
In Gilt's case, the company reached a $1 billion valuation in 2011 and an IPO seemed imminent. Business Insider reports that at one point, Gilt was hiring a new employee every single day. But by early 2012, the company still hadn't gone public and had laid off 10% of its staff. Gilt CEO Michelle Peluso told Business Insider that the company had "overextended itself" and started downsizing to compensate for its losses. Re/code reported that Gilt raised $50 million in new investments last week, which makes an IPO seem even less likely at this point as the money signifies that the company will probably remain private for even longer.
Now, Gilt is trying to hook its customer base with private-label goods and products sold exclusively on the site, and is also ramping up its marketing efforts. The company has yet to turn a profit, although Peluso told Business Insider that she expects Gilt to come close to breaking even this year.