Gilt Groupe plans to go public
today Nov 23, 2011
"I think it's entirely possible that in 2013, depending on the markets and depending on how things are going, that we would look to go public," Chief Executive Kevin Ryan was quoted as saying in the FT's online edition.
Ryan said Gilt would look at the process in 2012 but added that the New York-based "flash" sales site for designer clothes was unlikely to float in the next nine months as it had not yet held any meetings with advisers, the FT reported.
"We are certainly plenty big enough to go public. The question is, is it the right time, do you want to spend the time on that?" he said, according to the article.
Market turmoil that has forced many companies to delay going public this year has not affected Gilt's timetable for a float, Ryan said, according to the article.
Ryan said he expected Gilt's annualised turnover to be close to $1 billion after the company posted gross sales of $500 million in its financial year to June, the FT reported.
He also said the economic downturn was impacting Gilt "less than you'd think ... a recession is slightly more helpful for me," according to the article.
Flash businesses like Gilt Groupe and peers like Ideeli and Rue La La, which offer steeply discounted products for a limited time, burst onto the fashion scene during the recession to try to move a mountain of unsold clothes.
As the luxury inventory has dwindled and sales sites have become bigger, they have been forced to pay more for products or find other ways to procure them, leading to questions about whether they can turn growth into profits.
Last week Gilt added the ability to ship purchases from its distribution centres in New York and Japan to 90 new countries and Ryan said international shipping was "step number one before we go global," the FT reported.
"A year from now, we'll probably do close to $100m [in sales] outside the United States," he was quoted as saying.
Ryan added that Gilt planned to make more acquisitions like BuyWithMe, in the United States and elsewhere, against a backdrop of consolidation in the worldwide daily deals and flash sales space, the FT reported.
"The costs of going public have gone up, measured in every dimension, certainly financial as well as time-wise - and the alternatives to going public have got better. There used to be no secondary market, for example. That continues to evolve every year," Ryan said, according to the FT.
Gilt was not immediately reachable for comment. (Reporting by Michelle Martin; Editing by Gary Hill)
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