CEO

Gilt Groupe may be profitable before 2014: CEO

Reuters News
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Posted: Jul 01, 2011 5:29 PM

By Alistair Barr

SAN FRANCISCO (Reuters) - Gilt Groupe will likely be profitable before 2014 as new businesses being launched by the online flash-sales company mature, according to founder and chief executive Kevin Ryan.

Gilt is currently losing money because the company is spending to start so many new ventures, including a full-price men's apparel website called Park & Bond, Ryan told Reuters this week.

However, Ryan said he's "highly confident" Gilt will be profitable.

Amazon.com Inc, the world's largest Internet retailer, took roughly six years to start making money, Ryan noted.

"We will get there in less time," Ryan said.

Ryan, former CEO of online advertising giant DoubleClick, founded Gilt in November 2007. His prediction suggests Gilt could become profitable before November 2013.

Flash-sales websites offer steeply discounted products and services for a limited time. The model has caught on quickly in the retail industry -- especially the luxury apparel sector where Gilt currently leads.

Gilt hired 56 employees last month and now has about 750 staff. Ryan has said in the past that gross revenue for the company's fiscal year ending June 30 would be about $500 million.

Gilt is in no rush to do an initial public offering, partly because the company raised $138 million in venture capital backing at a $1 billion valuation in May.

"We've not had a single meeting about an IPO," Ryan told Reuters. "We will go public at some point, probably one to three years from now."

(Reporting by Alistair Barr; Editing by Gary Hill)