Further News From Gilt Groupe

February 16, 2010

Yesterday, I posted about Gilt Groupe, the online designer overstock giant.  According to New York Magazine, they’ve addressed the challenge of having too many customers and not enough product to sell to those customers by expanding the number of brands they carry (fine), ordering “planned overstock” directly from designers’ current lines (fine with me if the designers want to sell the same stuff at differing price points) and finally by having designers create lines specifically for them, without disclosing which are genuine overstock and which are created specifically for Gilt.  I’m not a lawyer, I’m just a Gilt customer, but that last one doesn’t strike me as ethical.

Gabriella Meriles, Gilt’s Director of Marketing and Communications, was nice enough to drop me a line and share their statement on the matter, which they’ve also posted on Styleforum.net and the forums at GQ.com.

It reads, in part (I’ve edited out a bit of preamble):

Our products are primarily excess goods from designers’ current lines, but we also place orders for items from upcoming seasons, and in some cases we ask that a particular item be cut in another fabric. As our orders have grown larger, we have begun to ask brands to cut products exclusively for Gilt. Designers have been producing exclusive product for large department stores for years, and as Gilt’s business has grown we now have the ability to extend that service to the e-commerce space. These are products that we have chosen specifically for our members, and they in no way compromise craftsmanship.

This raised some concerns for me: first, in the New York Magazine article, the author wrote specifically about Gilt working with designers to create designs that are less expensive to manufacture.  (The examples in the article are less stones on a piece of jewelry, or Scottish wool replacing Italian wool.)  I guess you can make a semantic argument that this mean’s they’re compromising materials or designs and not “craftsmanship,” but it would be pretty duplicitous to do so.

Second, while say, Nautica may make a line specifically for Macy’s, Macy’s is not claiming to be offering a discount on the retail price.  That’s because if the line is specifically for Macy’s, the Macy’s price is the retail price.  Similarly, if a designer is making a line for Gilt, the retail price is the Gilt price, period.  To claim that there’s a discount on a “woulda been” retail price imagined by Gilt or the designer is, again, duplicitious.

Given these two concerns and given that the statement didn’t address them, I asked Gabriela (via email) two questions which remain for me:

  • With regard to products made specifically for Gilt: have you listed a “retail price” beside the Gilt price? If so, will you continue to do so in the future?
  • Do you plan to distinguish on your site between items created specifically for Gilt (and never offered in traditional stores) and items which come from manufacturer overstock?

We’ll see what she says.

Further Info:

So some folks at the GQ forum have been discussing the situation – some of them received a form letter from the director of Gilt Man, which doesn’t answer the questions I’ve outlined above.  Meanwhile, Gilt had a sponsored affiliate thread at StyleForum.net, which has been deleted.  Folks there are presuming that Gilt didn’t like the criticism it was receiving for not disclosing their practices previously.

And further:

From the StyleForum mods:

The Gilt Groupe thread and banners have been taken down temporarily as we try to figure out what is going on with them. Their links have not been working for a while now and we are trying to iron out details. Neither they nor we have unilaterally cancelled our relationship and it doesn’t have anything to do with the recent “Exclusive stuff made for Gilt” thread.

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