Retail sites offer members a byte of the cherry

PUBLISHED : Wednesday, 18 March, 2009, 12:00am
UPDATED : Wednesday, 18 March, 2009, 12:00am

Entrepreneurs in Europe and the US - and, lately, in Hong Kong - have taken the thrill of a sample or warehouse sale and brought it to the consumer's front door. Well, to their computer, at least.

Online retailers of samples or overstocks are offering luxury and emerging brands to their members who are drawn by the low prices. And although retail sales are slumping across the board, those at the forefront of fashion e-commerce say business is growing steadily.

'In all the sales we have had so far, everything has sold out in between two and four hours,' says Benoit Lotter, chief executive officer of, a local site that ran its first sale a month ago.

The site has about 20,000 members, many of whom have participated in sales of fashion, watches and jewellery. (Lotter says his arrangements with the houses that provide the merchandise preclude him from discussing who they are, saying only that they are well-known brands. Nonetheless, he says an upcoming sale will feature watches and jewellery from Philippe Charriol.)

An e-mail is sent out to members two days before the sale to let them know to watch for an alert that a sale is on, and to keep their credit cards at the ready.

Privatesale membership can be obtained only through an invitation from an existing member, although there is an option to pay HK$3,888 for a VIP pass. Lotter says the restrictions are in place to keep access exclusive and allow members to feel as if they are part of an elite club.

Privatesale is one of a growing number of sites in a category generally described as 'online brand de-stocking events'. The 'event' component is key: instead of simply being able to access an e-commerce site and place an order, these sites offer select merchandise for usually just one or two days. When an item is gone, it's gone.

Prices are usually heavily discounted, ranging from 60 to 80 per cent below retail. Those who own and operate the sites are loath to discuss how they acquire the merchandise; often the products are samples, excess inventory or end-of-season styles (still current because they have just hit stores). But they are always legitimate and authentic, acquired directly from the source.

The category was pioneered in 2001 in France by Vente-Privee has about 6 million members in France, Spain, Germany and Italy, and in September last year opened up in the British market, where it now has more than 100,000 members. Sales begin at 6am on weekdays, 8am at weekends, and end 48 to 72 hours later, lending a note of urgency to the proceedings. Based on Vente-Privee's numbers alone, others in the industry have every right to feel confident: the site's sales amounted to ?545 million (HK$5.94 billion) last year, up nearly 50 per cent year on year.

'The time limit on the sales is a bit of a call to action,' says Carlota Espinosa, vice-president of Los Angeles-based, which launched in December 2007.

'People know they have to buy quickly because the offer is not going to last.'

HauteLook originally focused on women's fashion before expanding to children's clothing, beauty products and home accessories. Previous offerings have included 7 For All Mankind jeans, and Vera Wang's Lavender label.

The site has 500,000 members and counting (it's open to anyone with an e-mail address). Anybody unhappy with a purchase can return it for full credit, and Espinosa says that the site will eventually offer free shipping across the US.

'It really is a perfect model for what's happening in this economy,' she says.

That view is echoed by Paul Hurley, chief executive of, which has sold Michael Kors oversized sunglasses for US$80 (down from US$235) and booties from Oscar de la Renta for US$279 (down from US$760), and which was the first such site to launch in the US.

Hurley says that if it's true that the age of conspicuous consumption is taking a back seat, then savvy spending at home is the new vogue.

'People want to be discreet,' he says. 'They don't want to be seen getting out of a car with 25 shopping bags when their neighbour has just lost his job.'

That may be why Ideeli has become one of the most popular invitation-only sites around. The layout looks like a glossy magazine, with the products showcased as attractively as if they were in the window at Barneys, and delivery is quick.

'People see beautiful things and they get incredible value,' he says. 'That beats trying to get a parking spot at the mall.'

And, in a bizarre way, the current flat state of retail is almost a boon to these sites.

'Brands are selling less than they were before, which means there's more stock right now, and that's better for us,' says Lotter. 'It's not difficult for anybody to find a great deal.'