The rise of the flash sale continues.
Los Angeles-based HauteLook just raised an impressive $31 million round of funding through Insight Venture Partners, a New York-based private equity firm.
That's a lot of money. But with 2.5 million members, there's plenty to do with the dough.
This afternoon, I chatted with the site's senior vice president of marketing, Greg Bettinelli, about what HauteLook--which is free to join, if you haven't already--has in store. There are four main objectives:
1. Hire new people. The company recently hired Arthur Lewis, who spent 11 years at Gap, Inc., to forge relationships with specialty retailers. It's an area that flash sales haven't explored fully as of yet. Bettinelli wants to bring more unique talent like Lewis on board. "We really want to be able to attract talent--hire people with the right experience," he says. Talent typically equals a bigger paycheck, so this injection of cash will bolster that initiative.
2. Penetrate the market even further. Right now, HauteLook estimates that it has only captured 10-15% of the 25 to 45-year-old female market, its sweet spot. With additional funds, it'll be able to better promote the site beyond New York and Los Angeles.
3. Add categories. Sure, it might be known for selling contemporary labels like Splendid and Seven For All Mankind, but HauteLook currently sells in 11 different categories, and plans to expand into at least two or three more in the near future. First up? More wine and food. (The site's already had success with several Omaha Steak sales.) Experiences--spa, hotel, resort packages--will also begin popping up. However, HauteLook doesn't plan on making it a separate business in the same vein as Gilt City. Instead, the site will continue to merchandise under themes. A "beach day," for example, might include skincare, bikinis, accessories, and a resort package.
4. Continue to build strong relationships with brands. From its start in 2007, the US flash sales business model has changed quite a bit. Back then, the recession was in full swing--retailers and brands were eager to purge extra inventory. Now, as things improve, flash sales need to be positioned as an additional channel on which to make money, much like outlet stores were in the 1980s and '90s. Keeping partners happy is a big part of HauteLook's future.