Gilt City Scoops Up BuyWithMe

Daily deal company consolidation continues with Gilt City announcing today that it is buying the assets of BuyWithMe, confirming rumors that have been swirling for a month that the Boston-based site was up for grabs.

Terms of the deal were not disclosed, but Kevin Ryan, CEO and founder of Gilt Groupe, Gilt City’s corporate parent, made it clear that the company—which just last month bought DinePrivate.com—is doubling down in the deal market, saying in a statement that Gilt is “excited to capitalize on this incredible opportunity to grow our lifestyle positioning.”

Based in Boston, BuyWithMe has a customer base of millions and operates in 13 markets. New York-based Gilt, which operates in 10 markets, said that over the next year, it plans to expand into untapped markets as it takes on BuyWithMe customers.

BuyWithMe will eventually be rolled completely into the Gilt City brand, but during a brief transition, it will operate as a separate site called “BuyWithMe by Gilt," Caitlyn Carpanzano, Gilt City public relations manager said.

It's a bit of a surprise move, since just two months ago, BuyWithMe acquired San Francisco-based deal site Town Hog, doubling the size of its own operation, and Jim Crowley, the CEO of BuyWithMe seemed bullish about the site's future in an interview with Portfolio.com.

But the company, which sized up from 70 to more than 200 employees over the past year, apparently got too big too soon, according to reports indicating that there were a slew of layoffs in mid-October. According to a TechCrunch report written by one of BuyWithMe’s former employees, the company acknowledged that it “lacked the capital to continue paying its staff,” and on layoff day October 19 served whiskey, wine and pizza to the remaining staffers:

The company stated that it would retain 85 employees, but many employees spared the termination resigned. Email accounts were deactivated almost immediately, security cards were collected, and the remaining members of the sales team quickly returned to the floor to contact merchants.

Gilt City says some of the BuyWithMe team will join Gilt.

“One of the benefits with the deal was adopting the talented staff they have on board,” Carpanzano said, adding that the company was not disclosing the exact number of those who would be joining the Gilt team.

The company is in ongoing discussions with Crowley, who will be part of the transition, Carpanzano says.

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Teresa Novellino writes for Portfolio.com