June 4, 2010, 10:41 AM

HauteLook’s outlook on business expansion

With $31 million in new capital, HauteLook has aggressive development plans.

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With a fresh round of investment capital, private sale site HauteLook.com is promising to dish up an aggressive agenda of new business development by Labor Day.

 HauteLook.com, No. 191 Internet Retailer Top 500 Guide, has raised $31 million in capital from investment banking firm Insight Venture Partners and will use the money to fund a series of new business development, marketing and web site development initiatives.

“We will be using the summer lull to have a lot of new changes in place by Labor Day and heading into the fourth quarter,” says HauteLook.com senior vice president Greg Bettinelli. HauteLook.com, which now says it has 2.5 million members, plans more new merchandising categories such as gourmet, wines, food and spa services and grow the number of private sales it conducts each month by 10% to 20% to around 250.

HauteLook.com, which generated Internet Retailer-estimated web sales of $61.5 million in 2009, also plans to add on more personnel, especially established managers who familiar with traditional chain store operations, and develop a mobile commerce site. “There is lots of room for growth in our core demographic of women ages 20 to 45 and mobile commerce is a perfect vehicle for them and for our business model,” says Bettinelli. “The money we raised will help us do more faster.”

With more working capital, HauteLook.com also will expand more aggressively into social media and develop more data management tools and other brands that sell on the company’s private-sale platform. “We’re looking to attract more brands by offering them more value-added services,” says Bettinelli.

 HauteLook.com was founded in December 2007 as private-sale web site that offered discounted brand name apparel and accessories to women. But now that the company is established, HauteLook.com is morphing into a more diversified online marketplace, says Bettinelli. “There’s lots of room for category expansion,” he says.

In addition to other competing private-sale web sites, including RueLaLa.com, No. 103 Internet Retailer Top 500 Guide, and Gilt Groupe, No. 140 Internet Retailer Top 500 Guide, the space continues to attract new start-ups. In January after six months of development, two of the founding executives of online jeweler Blue Nile Inc., former senior vice president Darrell Cavens and founder and chairman Mark Vadon, took the wraps off their newest venture: Zulily.com, a private-sale web site aimed at young moms. Zulily.com launched as a free members-only web site that will sell baby clothes, toddler’s apparel and similar products through limited-time sales.

But Bettinelli says the $31 million in new capital and an earlier round of $10 million in funding raised in May 2009 from Insight Venture Partners, will help HauteLook.com to continue to diversify its business model. “This space is very young,” he says.

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