Precious samples or excess inventory?

Gilt Group is on track for $500MM in revenue in 2010. What's interesting is that the CEO is positioning Gilt as a way for designers to try out risky designs and offload them if they don't sell, but I don't know if Gilt can avoid lowering the perceived value of the designer brands they're working with. But that's clearly an issue CEO Susan Lyne is cognizant of. She's positioning Gilt as a way for designers to earn new customers, not a way for existing customers to get the goods at a lower price.

The day a particular label is on Gilt, traffic to that brand's site increases, across the board. Anecdotally, so many people have told me, "Oh my god, my new favorite designer is ..." because they were able to try a new one at a price that felt comfortable. If I'm going to drop $3,000 on a jacket, I'm probably going to do it on one of my old favorites, a smaller universe of brands that I know and I'm comfortable with. Starting this year, we're going to be selling exclusive items and capsule collections from emerging labels such as Trovata and Yigal Azrouël.

This is always the challenge for luxury brands who work with discounters. If you see a Prada suit on discount for 50% of retail price over and over, will you ever pay full price for a Prada suit again, even if your move up the socioeconomic ladder? Perhaps, but it's always a risk. The one thing Gilt has going for it is that the supplies of their goods are so limited that their argument that they're offering limited opportunities to sample designers is more credible than sample sales and other luxury discount websites that seem like endless bounties of luxury goods that were duds at their original price (I went with my sister-in-law to the Barney's Warehouse Sale in NYC a few years back, and because there were no dressing rooms, I saw people stripping down in aisles in a sterile, fluorescent-lit basement to try on samples grabbed from numerous bins that contained designer clothing that had been hand tossed into a sort of fabric salad, hardly the most flattering light in which to present those luxury brands).

When will someone make a Gilt Group for typefaces? That's something I'd appreciate when wearing my individual and not corporate budget hat.