Luxury for Less

Even in hard economic times, Theo Gray likes a little luxury. She likes it even more when the items feel as though they’ve been chosen just for her, laid out on black velvet, offered at a discount — and she can buy them online.

Current financial woes have made many a fashion-forward shopper alter her definition of “luxury,” but the Boston attorney adheres to its truest sense: Names like Elie Tahari, Alexander McQueen and Manolo Blahnik fill her closet and roll off her tongue. How does she afford them? You’ll have to be personally invited to find out.

In late January, Unity Marketing released the results of its most recent affluent consumer spending study. The survey of nearly 1,200 respondents with an average income of $199,200 showed that “even the richest Americans” are holding off on discretionary purchases. In fourth quarter of 2008, those customers spent 6.4 percent less on luxuries than they did in the preceding three months.

But in an otherwise dismal retail environment, there’s at least one spot as bright as a Cartier diamond. Invitation-only websites like Gilt.com, ideeli.com and RueLaLa.com claim continuous counter-cyclical sales increases by offering small lots of luxury — and in some cases, premium — brands at deep discounts.

Typical shoppers are women in their late 20s to early 50s who enjoy the thrill of a good deal, the excitement of being part of an “in” group — and the ability to buy fine items in a time-efficient, private manner when others around them may not be able to justify doing the same.

“I’m willing to shop if the prices are right,” says Gray, a regular visitor to Gilt Groupe’s Gilt.com. “That’s how I’ve always been. But the other day I was wearing a pair of Tory Burch boots. ... You don’t want to say, ‘Yeah, they’re a $500 pair of boots.’”

Launched less than a year ago, Rue La La already has a membership in the hundreds of thousands accessing its daily sales.

“One of things I have marveled at is how quickly our members have become addicted to the Rue La La experience,” CEO Ben Fischman says. “They come religiously to the site every day, whether they’re shopping or just browsing. Nothing has made us happier than how actively engaged our member base has become. ... We are pleased that in a recession we can still make the brands they love so accessible.”

Amanda Graber, manager of marketing and communications for Gilt Groupe, says Gilt.com has increased sales and membership every month since its launch in November 2007. The multi-category destination works directly with designers and brands, giving them a discrete outlet for their merchandise.

“We are marketing their names in ways and in regions that they wouldn’t necessarily be promoted otherwise,” Graber says. In addition to tried-and-true names, the site “does its part” for the industry by sponsoring up-and-coming fashion designers such as Costello Tagliapietra and Richard Chai.

Gilt offers 20 to 25 sales each week, and Graber credits the site’s success with the proven experience, reputation and industry relationships of its founders and launch team. “The key was making people trust what they were doing,” she says. “The majority knew of Gilt and were immediately interested in possibly doing business with us ... and now, we even have designers knocking on our doors, wanting to be a part of it.”