Deal hunters in San Francisco and Los Angeles have a new site to prowl starting today: Gilt City, the local deals arm of semi-exclusive “flash sale” site Gilt Groupe, has expanded to the west coast. Each city is currently offering three local deals, ranging from San Francisco’s Street Food Festival to a wardrobe makeover.
Gilt quietly started testing Gilt City in April, but it was available only in NYC. In June Gilt CEO Susan Lyne told us the company planned to expand into 15 to 20 markets in the US, but at that point nothing was finalized. Now things are finally beginning to ramp up, with a launch in Boston late last month and today’s expansion to SF and LA.
Gilt Groupe has offered online flash sales for years, selling products from luxury brands at steep discounts. That site is semi-exclusive as it requires an invite to join (though it isn’t tough to find one) — it looks like Gilt City doesn’t require an invite at all.
So why does this matter? Over the last year or so, we’ve seen countless startups try (and usually fail) to mimic Groupon’s stunning growth. But now Groupon is increasingly seeing competition from companies with established audiences, who will have a much easier time getting traction. Gilt has an established audience of users who already associate the brand with time sensitive hot deals, and it has plenty of resources — the site has raised $83 million in funding, including a $35 million round in May.
Gilt isn’t the only established site looking to get a piece of the group-deal pie — Yelp has already recently started testing its own local deals. Update: Gilt isn’t actually using a ‘group deal’ model, as their local deals will be ‘active’ regardless of how many people sign up for them. The same appears to be true for Yelp (though they are still experimenting).