Gilt Groupe, the online luxury-fashion retailer that sends its members sale and clearance information on expensive items, has taken in $40 million in capital from General Atlantic and Matrix Partners, reports The Business Insider. The New York company has been valued at $400 million and anticipates bringing in $500 million in revenue next year.
Gilt Groupe is able to offer its members better prices on luxury goods because it also acts as a channel for designers to unload excess inventory. With the economic downturn prompting a drop in discretionary funding, designers say they have more surplus on their hands than usual. To become a member, a user must receive an invitation — preserving the exclusive quality of the brands its sells, even at a 70 percent discount. Sales are conducted online and last about 36 hours.
Gilt has expressed interest in expanding into luxury travel packages and other areas that might appeal to an affluent or upper-middle class market. Founded in 2007, it has now raised $58 million to date.