Jewelry designers discover the sample life

May 16, 2008

Alexis Maybank, left, and Alexandra Wilkis Wilson, founded Gilt Groupe in November 2007.

By Mary Wisniewski

New York—After witnessing the bargain-induced hysteria that goes on at a typical sample sale, Harvard graduates Alexis Maybank and Alexandra Wilkis Wilson wondered if they could shift that consumer enthusiasm to a more tranquil environment.

"It just seemed like the perfect business to bring online," says Maybank, chief executive officer of Gilt Groupe, which runs a sample sale for jewelry and clothing on Gilt.com and was founded last November.

Held exclusively online for 36 hours—or until everything is sold out—the sample sales feature a revolving array of specific designers, a different one for each sale. Some of the jewelry items up for grabs were discontinued while others were created just for Gilt.

A team of buyers chooses which established and up-and-coming designers are featured. Wilson, the chief merchandising officer, says that she goes after brands that will resonate with members, including international ones. Judith Ripka, the first jewelry designer to be featured, has reappeared due to the brand's popularity, Wilson says.

"[Judith Ripka] solidified jewelry sales as an important category for Gilt," Wilson says, adding that all the company's jewelry sales have been successful, and most sell out in hours. Gilt has also held sales featuring Kwiat, John Hardy and Links of London.

In addition, the company has observed that customers are loyal to specific brands, generally buying multiple pieces under the same label.

But while bargain jewelry found online might thrill shoppers, brick-and-mortar jewelers aren't so enthused.

Barbara Radus of Jewels by Joseph in Newport Beach, Calif., says she doesn't like the idea of online jewelry sample sales, unless they offer strictly out-of-date merchandise.

Two-drop, frosted-quartz earrings with 14-karat gold and white sapphire stars by Emily and Ashley and offered at a Gilt Groupe sample sale.

Given the jewelry industry's competitiveness, coupled with the rising price of precious metals and her store's own geography—Newport Beach, Calif.—Radus says retailers such as herself have no choice but to carry the brand names that have exclusive appeal, and she's angered at the thought of designers offering discounts.

"I'd get really peeved if I found my vendors on there," she says. "It's a struggle for small, independent retailers."

Gilt Groupe wasn't specific about what deals it had set up with which vendors.

As an online retailer, Maybank acknowledges that being able to sell expensive jewelry online, sight unseen, was a bit of a surprise. Furthermore, there are no returns, refunds or exchanges accepted for jewelry or watch purchases.

Maybank credits the company's success to the trust of its customers.

The customer base itself simply started by word-of-mouth, with the founders inviting personal friends, who in turn invited their own friends to join.

"Our customers tell us who would be interested," Maybank says. "It ensures people have some control of where the business goes."

Ashley Green, a designer for sister team Emily and Ashley, heard about the site through word-of-mouth, and immediately wanted to participate.

Large white agate rock cabochon pendant with 14-karat gold critters and semiprecious stone bits on 14-karat gold link chain by Emily and Ashley and offered at a Gilt Groupe sample sale.

Initially, Green fretted over the decision to go into online sample sales, but her worries were eased after she learned the names of the other reputable jewelers that Gilt Groupe had featured at the sales. For designers, she says, the site is a great way to get their names out there and an ideal way to offer jewelry at prices more affordable for younger women.

Green says that Emily and Ashley hasn't received any negative feedback from its retail clients, and made sure to avoid any issues by protecting the styles sold in brick-and-mortar stores.

"It's an easy way to move inventory," Green says, adding that the site is also a more convenient way for consumers to shop.

When choosing which items to feature on the site, Green focused on hitting Gilt's target customers. Specifically, the brand selected pieces with basic colors and simple styles, as well as some designs that had already been featured by the press.

"We focused on stuff that would read 'Emily and Ashley,'" she says.

Green says black coral and turquoise did best at the sample sales, as did pieces with price points of $300 and under. The jewelry featured was sold at wholesale prices, on average, she says.

Editor's note: This story first appeared in the May 1, 2008 issue of National Jeweler.