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Linda Mann tried on a pair of $250 wide-legged Paige jeans at Holt Renfrew recently and found that the size 28 fit like a glove. But she didn't buy them. Instead, she ordered almost the same pair of Paige denims several weeks later for $139, not including shipping, at BeyondTheRack.com.

In all, Mann has shelled out about $1,000 at the invitation-only shopping site since signing up two months ago. The price was right: no membership fee and up to 70 per cent or more off designer clothing and accessories labels. The site gives her just two days to decide whether she wants, say, a Prada handbag or a Marc Jacobs jacket. Stock is limited, so she has to make her mind up fast. On Aug. 31, for example, the site sold out of 71 new fall Burberry bags and wallets – each of which cost up to $1,100 apiece (as much as 30 per cent off) – in 11 minutes.

“I can see how people really could get hooked on using this website,” says Mann, a 54-year-old retired judicial assistant and mother of two in Vancouver. “Maybe I'm a little hooked. I've been thinking about [buying] Christmas presents for my kids on it. I hate being in crowds and going through store racks that are really disorganized.”

Call it luxury shopping in tight times. About a dozen U.S. shopping sites, including HauteLook.com, RueLaLa.com, Ideeli.com and Gilt.com, have popped up during the downturn, offering private sales of premium merchandise at cut rates. Now, the online trunk sale has arrived in Canada, threatening to turn upscale retailing on its ear.

“It's discount luxury, period,” says Milton Pedraza, president of the Luxury Institute, a New York research group. “Given the severe economic crisis and the need to survive, luxury brands do have ... to sell [excess inventory] on these online shopping networks. But it does affect your perception as a luxury brand.”

There's nothing new about off-price outlet stores, and Winners is synonymous with designer deals. But the online sites, a hybrid of eBay auctions and the Costco treasure hunt, are a stress-resistant click away for increasingly Internet-savvy consumers.

Beyond The Rack, which is headquartered in Montreal, opened its virtual doors to bargain-hungry fashionistas in April, while Los Angeles-based Haute Look started shipping to Canada last month. Others, such as Rue La La, intend to do business here as early as 2010.

The timing couldn't be better. Budget-conscious consumers, still bruised by the recession, are gearing up for the holiday shopping rush. Manufacturers, meanwhile, have plenty of excess inventory to unload.

Frugalistas helped to spur a surge in the shopping sites' memberships as they scaled back their spending at traditional shops. Global sales of luxury goods are expected to tumble by 8 per cent to $229-billion (U.S.) this year, according to consultancy Bain & Co. At the same time, the well-off are embracing online shopping like never before, Pedraza says. Almost 20 per cent of social networkers today belong to a discount e-commerce site selling high-end merchandise, his recent research found. In the past, that number was so low that it was “off the radar.”

Perhaps most significantly, the sites' prime customer is the envy of any retailer: female, 25 to 45 years old, with a household income of $50,000 to $100,000 – and up.

“Our girl is Jennifer Aniston or Cameron Diaz,” says Adam Bernhard, founder and chief executive officer of HauteLook.com. “Whenever you see pictures of Cameron Diaz and Jennifer Aniston, you see them with the great pair of jeans, the top, the great little leather jacket and the designer accessories. That's our girl.”

Their girl, who spends an average of $100 (U.S.) per purchase, is also a “swiper,” he says. She dives into the site and is gone within five minutes. The sites are racing to offer a wider range of products, and easier-to-use formats, to get her to stay longer and fork out more. They're adding everything from men's and children's wear to beauty and home products to travel and spa services. Haute Look upgraded its site in July with larger photos and more detailed merchandise descriptions, including models' measurements and sizes.

And while the sites often stock end-of-season or older goods, some of the products are current. The Burberry items that sold out in 11 minutes were brand new. Jenny Frankel, who recently bought a $420 BCBG Max Azria cocktail dress from a BCBG store in Toronto, spotted the strapless black number about a month later on HauteLook.com at a 30-per-cent markdown.

Frankel has a unique perspective on the sites. Her company, Toronto-based Cover FX Skin Care, began supplying HauteLook.com with its upmarket lip balms and foundations more than a month ago. She makes sure, however, never to provide exactly the same packaging or item for sale online that are on store shelves.

Cover FX sold about $15,000 worth of its goods in three days on the site, beating its targets. For the holiday season, it will again offer some of its discontinued or excess inventory on the site at up to half price.

“We were concerned when we were first presented the Haute Look concept,” Frankel says. “We do not discount our product in stores, and we don't plan to start.”

But the site maintains an upscale image with its high-profile labels and high-quality product photos, she says. “Given this economy, one of the largest challenges that brands have is having capital invested in excess inventory that is not moving. That's a huge liability.”

For the site operators, the outlook seems promising. Rue La La, which has signed up 1.2 million members, was snapped up by a large U.S. Web company for $350-million (U.S.) late last month. Beyond The Rack, just over six months old, already has 250,000 members. Next year, it expects to have two million members, reach $50-million in sales (which is five times the amount it forecasts for 2009) and become profitable.

Profit margins, at close to 20 per cent of sales, can also be attractive compared with single digits at conventional stores, says Yona Shtern, Beyond The Rack's co-founder and chief executive officer. Return rates, at roughly 10 per cent, are often less than half those at full-price apparel shopping sites, he says. Shoppers may be more apt to tolerate a less-than-perfect discount purchase than one at regular price, Bernhard adds. “When you're paying full tilt, that thing better fit like a glove.”

The business model is a relatively low-cost one, partly because many of the sites don't carry the risk of owning their inventory. Marketing is minimal, including regular e-mails to members to tout upcoming sales. “The members do the marketing for us,” says Ben Fischman, founder of RueLaLa.com.

But the business isn't a cake walk either. “There's probably a misconception that this is an easy thing to do,” says Paul Hurley, co-founder and CEO of Ideeli.com, which charges $84 (U.S.) annually for “First Row” subscription status, which gives shoppers access to sales an hour earlier than members who don't pay the fee. “We have to move very fast.”

Operating the sites is labour-intensive. They juggle four to six sales events daily, requiring a constant change of Web information and photos.

The online shopping model has drawbacks for shoppers, too. It fails to deliver instant gratification, taking up to two weeks to ship products. Mann had to wait almost a month for her Paige jeans to arrive, although BeyondTheRack.com did keep her abreast of the shipment's status.

Return policies vary. Many of the sites, such as BeyondTheRack.com and HauteLook.com, allow returns within 14 days for a credit. Ideeli.com offered no returns until last April, when it began providing a credit. RueLaLa.com features a full refund within 30 days.

The U.S. sites haven't found a cost-effective way to ship to Canada. Haute Look is now the exception, having teamed up with a logistics specialist to charge a flat $10.95 (U.S.) plus 18 per cent for duties and taxes, amounting to $28 for an average purchase.

As the holiday season arrives, Beyond The Rack is boosting the number of daily sales events to six this month from just two in September. Mann, for one, will be checking out the site in the coming weeks. She has already returned a $250 Armani jacket (regular $450) because the size wasn't right. But she's pleased with her Paige purchase.

“I absolutely love the jeans,” she says. “They are a very nice fit and the denim has enough spandex in it to stretch and feel comfortable. And my husband says they look very ‘hot.'”