Vente-Privee Says U.S. Venture With Amex Is Hampered by Outlets

Vente-Privee.com, the European online retailer that runs a U.S. site with American Express Co. (AXP), said the proliferation of fashion outlets across America is challenging the company’s growth.

Vente-Privee, which plies discounted high-end fashion, wine and Iggy Pop albums to its 17 million European members, began operating in the U.S. a year ago and is finding it difficult competing with discounted brands at outlets as well as the immediacy in which Americans expect delivery.

“The market is not very easy because almost all the brands produce inventories for the outlets,” Vente-Privee founder Jacques-Antoine Granjon said in an interview today in London. “I don’t wear Ralph Lauren because I know you can buy Ralph Lauren for $10 at any outlet.”

Vente-Privee’s average two-to-three week delivery times are also longer than U.S. customers expect because the Paris-based company doesn’t have inventory, Granjon said.

While Granjon is banking on the American pastime of shopping to boost revenue and fuel expansion, business has been somewhat hampered because fashion and goods are often on sale there, compared with Europe where retailers are typically only allowed to sell at discounts a few times a year. It’s also a crowded market, Granjon said, with competition from companies like Gilt Groupe Inc. and Rue La La as well as Amazon.com Inc.

‘Takes Time’

“This kind of story takes time and we have to focus more on real success which is the relationship with brands and offering brands that may not be at the outlets,” the long- haired, jeans-wearing founder said, adding there were no plans to quit the U.S. market.

The U.S site had sales of $20 million to $25 million in its first year, he said.

For now, Vente-Privee, which gets 80 percent of its business from France and is projecting 1.3 billion euros ($1.7 billion) in revenue for 2012, is focusing on Europe. It’s present in eight European countries and Granjon said he’s concentrating on sales in Italy, Spain, Germany and the U.K.

The company is 20 percent owned by Summit Partners and there are no plans to take it public or seek acquisitions, Granjon said. Top brands sold on the site include Disney, Camper, Desigual, Diesel and Triumph.

Granjon’s also focusing more on the music industry and has plans to start selling more CDs, concert tickets and even sponsoring tours. He also wants to premiere more albums on his site, like the album launch he did in May with Iggy Pop. Iggy sold 20,000 records through the site, Granjon said.

“Music is emotional and we started music because it fed our brand and it’s about a culture,” he said.

To contact the reporter on this story: Kristen Schweizer in London at kschweizer1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.