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Hudson’s Bay Overhauls Gilt Site, Integrating Saks Off 5th Business

Gilt is getting a much needed facelift, a broader assortment of goods and a closer integration with Hudson Bay Company’s other nameplates.

It’s been 10 years since flash sales were the hottest retail channel out there. But as with all trends, their luster faded once the recession receded, the novelty wore off and the overstock, which flowed freely through sites like Rue la la, HauteLook and Zulily, dried up.

Since then, these sites have had to develop new models to survive. Gilt, which was a leader in the flash sale realm when it launched 10 years ago, was purchased by Hudson’s Bay Company 18 months ago for $250 million, a fraction of its valuation just a few years prior. Since then, the flash sale site’s performance has been lackluster. In contrast to the Saks Off 5th business, which saw a site redesign last year, Gilt had been heading in the wrong direction as HBC worked behind the scenes toward a new strategy and user interface.

Hudson’s Bay CEO Gerald Storch said Gilt was a “deteriorating business” at the time of its purchase but HBC saw promise in the technology and the team.

Storch said there’s always great enthusiasm for Gilt whenever he’s talking to consumers. “Everyone I talk to loves Gilt,” he said, according to the Seek Alpha transcript of the company’s second quarter earnings call. “And that’s been a little bit in contrast [with] the performance of the business. And the key part of that is providing a modern experience.” Storch added the re-launch of the site around intent-based shopping is a big part of the new direction.

As part of this focus on intent, Gilt will be less reliant on flash sale events that time out after a short period. The shopping experience has also been enhanced with new menus that allow consumers to shop by choices like category, featured or events. The site and its daily emails will also be more personalized, focusing on what each consumer is most interested in as the company learns more from their search and purchase habits.

[Read more about HBC’s business: Financial Roundup: HBC Focuses on Digital and Luxury Sales]

HBC is also making the site easier to shop by integrating it with its physical fleet. Customers can now pickup and return items at Saks Off 5th stores and there may be more Gilt shops within Saks locations to come. By the holidays, Saks Off 5th goods will be available on Gilt, increasing the offering by a “very significant number of SKUs.” In fact, the company is working to increase the online assortments across all of its banners. That along with easier shopping experiences online and on mobile, top the company’s priorities in digital.

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“Any time you have a greater assortment, more styles, more depth, you’re more likely to convert the customer,” Jonathan Greller told Fashionista. “We’re going to have all of that inventory, and that inventory will be available from our distribution center. We can ship it from one of our stores. We’re going to be able to offer our customer merchandise anywhere, any time, any place she is.”

For now, Gilt is still mainly focused on offering discounts of up to 70 percent off, but the company sees an opportunity to grow its full-price goods.

Storch said the impetus for the redesign was to better meet consumer expectations—and to better address the Amazon challenge. The new Gilt site and offerings are just one part of the company’s digital push, which includes investments in its fulfillment centers. In the second quarter, the company achieved 11 percent growth in digital sales, lead by a 20 percent growth in its digital business in department stores specifically. This outpaces online growth and almost puts it on par with Amazon’s quarterly results. “There is no reason, why we can’t keep up or even exceed the best in class when it’s comes to digital performance, and I think we’re doing that,” he said.