Report: Gilt Picking Up Troubled Daily Deals Site BuyWithMe
[Updated 10/28/11 2:00 p.m. See below.] According to BetaBeat, fashion site Gilt Groupe is in the final stages of acquiring its New York neighbor BuyWithMe, a daily deals site that made six acquisitions this year and expanded to Seattle—but then started showing signs of distress. Just last week, reports emerged that BuyWithMe, which started in Boston, had laid off 100 people and was looking for a buyer. Both companies are backed by Matrix Partners. Xconomy didn’t immediately receive responses to queries sent to Matrix and BuyWithMe. Bain Capital Ventures, an investor in BuyWithMe, declined to comment. A spokeswoman for Gilt said the company would not comment on the rumor. [This paragraph was updated to include the response from Gilt.]
It’s little surprise that Gilt emerged as the taker for what’s left of BuyWithMe. Where other deals-oriented sites have faltered, Gilt has consistently proven out the model that it helped pioneer. Gilt is what’s known as a “flash sales” site—much of its business comes from limited-time sales of highly sought-after clothing, accessories, and home decor. Its founders, Alexandra Wilkis Wilson (who is one of our Xconomists) and Alexis Maybank, are so confident in the loyalty of their customers that they recently launched a full-priced men’s site.
Gilt raised $136 million in May from Matrix, as well as Draper Fisher Jurvetson, Eastward Capital, General Atlantic Goldman Sachs, New Enterprise Associates, Pinnacle Ventures, Softbank, and TriplePoint Capital.
BuyWithMe had raised $30 million in three rounds and said as recently as May that it hoped to double its presence to more than 25 cities. It’s not clear whether the company’s quick demise will dissuade other players in the daily deals space, however. Earlier this week, New York-based kgbdeals and San Francisco-based Mobile Spinach told Xconomy they believe they each offer distinctive strategies and products that will ensure their survival.