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GILT SWITCH: Gilt chief executive officer Susan Lyne and chairman Kevin Ryan are trading places, the company said Monday, but don’t blame the move on stalled growth at what has been hailed as one of the Internet’s most glittering success stories. As part of the announcement, the company revealed it is on track to do $400 million to $500 million in gross revenues this year, up from $170 million in 2009.
That sounds great. But it also sounds familiar.
Turns out that in August 2009, the company said it would generate revenues of $400 million and be profitable “in a few months.”
So what happened? Did Gilt miss its target?
The most recent announcement refers to calendar 2010, and the August statement referred to fiscal 2010, which Gilt runs from July 2009 to July 2010. Gilt has not changed its internal accounting methods but said it is now using the calendar year for public statements and declined to reveal its fiscal year revenues “because it just gets confusing,” said Ryan. Plus, he added, the company is private, so it isn’t obligated to disclose any financial information.
Nonethless, Ryan conceded, the company did not meet its target for $400 million for fiscal year 2010, although he declined to reveal the size of the shortfall.
But Gilt is still growing much more quickly than competitors such as saks.com, he continued, pointing out the company is projecting revenues of at least $400 million by the end of this year after only three years in business. (Gilt launched in November 2007.)
And for skeptics who might wonder if the company might again fail to meet its projections, Ryan said, “We’re not quite as seasonal as other businesses, we’re not a big gifting site, so we can tell.”
Going forward, Lyne will focus on business development and strategy, while Ryan will handle day-to-day operations.
The company does not plan to enter completely new categories in the next six to nine months but will aim to be stronger and deeper in its existing businesses. As for profits in fiscal year 2010, the company chose aggressive growth instead, a strategy which also paid off at DoubleClick, he said, where Ryan used to be president and ceo. Google bought the company for $3 billion in 2007.
Lyne joined Gilt in September 2008 and oversaw its expansion into six lines of business, Japan and more than 1,000 brands. Gilt has 500 employees. Previously, Lyne was president and ceo of Martha Stewart Living Omnimedia.
The company has raised $91 million in venture capital backing to date. — Cate T. Corcoran