Online Frenzy for Flash Sales

April 10, 2010— -- Everyday at noon Nicolas Mullen, a student at Fordham Law School, was noticing a trend in the study room, a hush would take over and everyone seemed to be clicking frantically on the same Web site on their laptops.

After asking around he learned that people were logging on to Gilt.com -- a members only luxury online shopping site that offers deep discounts for a short amount of time, known as flash sales.

For Mullen and his wife Hayley, this was a great way to get the designer brands at great prices.

"It's the excitement of getting a good deal and knowing that you are getting a quarter of the price that someone else paid for the same thing on a brand that you really like," said Nicolas Mullen. "And after we had our first purchase and we knew the quality was there and we knew that there wasn't really a risk that we were taking, we definitely made it a more common occurrence."

These kind of sites sometimes offer up to 70 percent or more off on designer brands like Calvin Klein, Zac Posen and Christian Louboutin.

In the past year the Mullens say they spent $2,393 on Gilt, they purchased everything from wine to galoshes, handbags and dresses. Had they made their purchases in retail stores it could have cost them upwards of $5,000.

In this slumping economy, the retail market has been hit hard, often leaving millions of dollars worth of inventory unsold.

Flash sites like Gilt, owned by theGilt Groupe, HauteLook and Rue La La are amongst the pioneers who help designers unload unsold erchandise, but recently more established companies like eBay are getting in on the game. In April, eBay launched their version of the flash site called the Fashion Vault.