Asked why all the buzz, Federico Marchetti, chief executive officer of the newly formed Yoox Net-a-porter Group, said, “Online luxury is one of the sectors showing the highest growth rate. It’s under the spotlight, and all brands are watching. Yoox and Net-a-porter were two leaders, two number-ones in their respective areas. When two leaders are joined, they draw more attention. Also, this was an innovative merger, the first in the luxury online arena. It may not be the last, but it’s the first.”
This story first appeared in the December 16, 2015 issue of WWD. Subscribe Today.
Arriving at the Milan headquarters from London on a nippy, foggy December morning, Marchetti had just finished a two-week “road show” of the group’s U.K. and U.S. offices and distribution centers, designed to meet employees and answer questions.
“It was a beautiful experience, fun and enriching. I learned how many talents we have, how [much] we can do, how much can be optimized. We are culturally very similar, not the way we’ve been portrayed, and we all share the same goal,” which is serving the customer, said Marchetti, who founded Yoox in 2000. “I always put myself in the customer’s shoes.”
Marchetti was set to visit the Italian offices in Milan and Bologna as well as the latter’s logistics center before Christmas, and move on to Asia, Hong Kong, Shanghai and Tokyo after the holidays. The group today counts 3,500 employees.
He traveled with Alison Loehnis, the newly promoted president of the Net-a-porter Group, praising her as a talented leader. Marchetti underscored the relevance of the team he has set in place, looking ahead rather than basking in past achievements. “Leaders must keep growing, and at a faster clip than the market, to maintain their advantage.”
Marchetti had long been touting the advantages of fusing Yoox and Net-a-porter, envisioning the new group as far back as 2009. As reported, pro-forma revenues in the first nine months of the year totaled 1.2 billion euros, or $1.3 billion at average exchange, climbing 32.2 percent from the same period in 2014. The new group builds on in-season and off-season fashion, and the management of online monobrand stores, and the synergies of the merger “exceeded expectations,” said Marchetti, who also boosted the level of expected cost savings to 85 million euros, ($94.3 million), from 60 million euros ($66.6 million). Net-a-porter’s former owner, Compagnie Financière Richemont, continues to hold 50 percent of the new company’s share capital, but only 25 percent of the voting rights to ensure that Yoox Net-a-porter remains independent.
“Richemont realized that it could not be a controlling company, a neutral platform was needed,” said Marchetti, calling the merger itself “very innovative” in its structure. “YNAP continues to be an independent company and neutral both at the management and shareholder levels.” The group, which was publicly listed in Milan on Oct. 5, is expected to leverage 45 synergies in six areas: retail, operations, corporate, technology, marketing, and content and brand relations.
Marchetti trumpeted YNAP’s strength, evidenced by its Black Friday and Cyber Monday business, which set records. Black Friday revenues soared 82 percent compared with the combined results of Yoox and Net-a-porter a year earlier. On Cyber Monday, YNAP sold one item each second on average and received one order every 1.4 seconds, Marchetti reported, citing a formidable “operating machine.” YNAP ships to about 180 countries. Just under 30 percent of combined revenues come from North America, followed by Europe, the U.K., Asia-Pacific and the rest of the world.
“I am very happy, but now it’s a matter of execution,” said Marchetti, who masterminded the merger with Richemont chairman Johann Rupert — a fusion that stemmed from “admiration.”
“For 15 years, I looked at Net-a-porter with great admiration for what had been built and the way it had been built. I first thought about a merger in 2009, then the rational side kicked in. These are two businesses that are complementary, the industrial rationale beneath it is overpowering.”
Natalie Massenet, who founded Net-a-porter in 2000 and left in September, was said to be unwilling to sell, and some observers questioned how the stylish former fashion editor, who also heads the British Fashion Council, and the analytical Marchetti, would get along. Massenet, meanwhile, has hinted at a next act and registered a company in the U.K. named Imaginary Ventures Ltd. But no specifics yet.
As for Yoox’s digestion of Net-a-porter, Marchetti said, “There is no desire to revolutionize anything here. With admiration, there is no desire to change. There’s been so much speculation about things that do not exist,” he continued. “There’s content that is so much part of Net-a-porter’s offer and DNA, it’s obvious there is no intention to make changes. We did not close The Outnet, contrary to speculation, because we realized that its customer is totally different from that of Yoox.”
As reported, the group plans to shutter Thecorner.com and Shoescribe.com by the end of the spring to avoid overlaps with Theoutnet.com and Net-a-porter, respectively.
Showing his belief in the company, Marchetti in November raised his own shareholding in the group to 6.1 percent from 5.7 percent.