Ideeli flash-sale site sells high fashion for less

NEW YORK -- When the buyers working for the discount fashion website Ideeli return from trips to designer showrooms in the "garment district" here, they're often as euphoric as shoppers who have found great deals.

Recently, some of the excitement has been about accessories from hot up-and-coming hair accessories designer Deepa Gurnani and Nine West co-founder Vince Camuto. But it can also just be a few dozen boots from a top designer they're not allowed to mention.

These "merchants," as Ideeli likes to call them, sometimes get calls from manufacturers when stores return merchandise or cancel orders. But, more often than not these days, it's because a brand realizes it's more cost-effective to make extra and knows there's a growing demand for deals on name-brand clothing and accessories.

Enter the growing influence of Ideeli and other sites that specialize in "flash sales." While Groupon and other daily-deal sites typically feature one daily deal in a local market, flash-sale sites have limited-time sales that feature many pieces from one or more designers' lines. Ideeli takes the concept even further and often features sales from as many as 40 designers at a time, selling women's, men's and children's clothing, as well as home goods.

"It's the digital equivalent of an entire store's merchandise being on sale," says Nita Rollins, a digital marketing expert and Ideeli member.

Ideeli's goals are the same as many shoppers' this holiday season: Buyers are looking for the lowest prices on the best products.

"The great recession really, really accelerated our growth," says CEO Paul Hurley. "Brands were more interested in working with us."

Ideeli (pronounced "ideally") placed No. 1 on Inc.Magazine's ranking of the nation's fastest-growing companies this year. The site's three-year sales growth of 40,882% secured its spot and was twice the growth rate of the No. 2 company, Solazyme. Revenue in 2010 was $77.7 million.

The site has almost 5 million members and was ranked fourth among flash-sale sites in unique visits last month, according to Web-tracking company ComScore. Ideeli, which launched in 2007 with five employees, now has 250 and is still hiring.

While there's less luxury merchandise to be had at a discount for the site post-recession, Hurley says there are also far more shoppers in the "aspirational" or "mass affluence" segment the site targets.

Ideeli's members are mostly women and have household incomes ranging from $50,000 to $250,000 a year, says spokeswoman Becky Wisdom. (The site started offering men's clothing last fall.) They are the Nordstrom, Macy's and Bloomingdale's customers who appreciate the wide price range of clothes, accessories and home goods on Ideeli's site, says Ideeli strategy VP Barbara Levy.

These shoppers are looking for really good deals with a "splash of luxury," says Wisdom, noting that prices can go as high as $3,000.

Ideeli says its prices are 30% to 80% off retail prices.

The site has a more midbrow philosophy than higher-end Gilt.com. But Ideeli sprinkles enough high-brow brands — such as Sue Wong and M by Missoni — in with the Tahari and Kenneth Cole to keep shoppers at all levels coming back.

"Judging by their phenomenal growth, Ideeli does indeed seem to have something for everyone," says Rollins, who is a member of several flash-sales sites, including the higher-end Gilt and Amazon's MyHabit.

Shopping at Ideeli can seem a bit more like T.J. Maxx and less like, say, Saks Fifth Avenue's end-of-season clearance. The Ideeli shopper must be "systematic in the face of a little chaos," says Rollins, who works for the digital marketing agency Resource Interactive.

"Just as offline sale shoppers are willing to comb the racks and deep dive into the bins for the buried treasure, so too does the Ideeli shopper believe there is right-priced booty awaiting them, so long as they are willing to scan all the options," says Rollins.

While flash-sale sites are attractive to many busy fashion-conscious women, retail analyst Howard Tubin says they don't pose much of a threat to brick-and-mortar off-price stores such as T.J. Maxx.

"A lot of what they offer now are newer or emerging designer brands that are probably unknown to a lot of people," says Tubin of RBC Capital Markets. "When it comes to apparel, people like to go to stores and shop and try things on."

Behind the scenes

Levy says her old life as a longtime buyer and executive at retailers including Macy's differs dramatically from her new one. She used to start planning what she'd buy for the next holiday season right after the last one ended.

Decisions about what to feature at Ideeli for the holidays are typically made a few months and even weeks before the season. They can also have as much to do with what they can get as it does what they want to get. "Everything moves much more quickly," says Levy.

So the buyers get calls from brands' representatives and hop in cabs or on the subway to go check out the samples at showrooms near Times Square. Like Ideeli's members, these buyers have to act fast or risk missing a great deal. Buyers for department and specialty stores visit the same showrooms as Ideeli does — just far earlier in the season when the prices aren't as good.

Indeed, Ideeli is a fast-paced world of off-price but on-trend fashion.

Racks of puffy coats, frilly blouses and other popular styles of clothes fill the hallways at the site's bright offices outside of Chinatown. The company occupies three floors of a building that also houses luxury brand Dolce & Gabanna and the more traditional designer Lafayette 148, which takes its name from the building's address.

On the 10th floor, dozens of buyers sit in rows of white cubicles. From here, they work with designers, which they call "vendors," to negotiate the size, prices and contents of orders. They're also drawing up the "storyboards" that show how the disparate pieces of clothing and accessories all can fit together.

Sure, it's all part of what's known as the upsell — attempts to get people to buy more than they came for — but it's one of the reasons consumers flock to sites including Ideeli for inspiration.

"It's not people looking for that $10,000 Chanel bag, but … an easy update to your wardrobe that's not going to break the bank," Wisdom says.

If a celebrity — or, more important, Kate Middleton— shows up in photos wearing something that starts getting buzz, the buyers will call the vendors most likely to carry a similar dress, order some and get them up on the site as fast as possible, with a picture of the celebrity — or princess.

On the sixth floor of the offices here, a cheerfully weary model poses for a series of shots in one of the website's eight studios. With a backdrop of camera flashes, Levy explains the whys behind some of Ideeli's buys this holiday season.

The site stocks up on the kinds of merchandise consumers steer toward as gifts, or at least that Ideeli thinks they should. For example, Levy recommends chunky costume jewelry that makes a statement no matter what it's worn with, but without breaking the bank.

Some other Ideeli-featured gifts for the holidays and why they were chosen:

•A two-ply-cashmere blanket and eye mask for travel with a matching case ($199.99). More plies mean softer, better-quality cashmere.

•Leather boots with rubber bottoms ($29.99-$179.99), which make them more comfortable and warmer on cold ground.

•Boots and purses with buckles that actually work ($29.99-$199.99). Lower-quality accessories often use hardware that's just for decoration.

•Puffy coats with inner seams that are reinforced with piping to make them less likely to rip from wear and tear ($69.99-$149.99).

"If we put in on the site, we're proud of it," says Levy.