MILAN — Lifted by growth in all key markets and business channels, Yoox SpA continued its upward trajectory in the first half.
In the six months ended June 30, the Italian e-tailer posted a 15.9 percent gain in net profit to 2.6 million euros, or $3.5 million, compared with 2.2 million euros, or $2.8 million, in the same period last year. In the three months ended June 30, earnings rose 42.9 percent to 1.6 million euros, or $2.2 million, compared with 1.1 million euros, or $1.4 million, in the same period last year.
Despite the increase in profits, Yoox shares posted the worst performance in the 100-issue WWD Global Stock Tracker and fell 2.3 percent to 20.20 euros, or $27.15.
In the first half, revenues climbed 14.7 percent to 238 million euros, or $326 million, compared with 207.4 million euros, or $271.7 million, last year.
Touting the group’s “solid results” in the second quarter, Federico Marchetti, founder and chief executive officer, said Yoox “once again proves to be one of the few e-commerce business models able to generate margins and solid growth at the same time. We are ready to face the second half of the year full steam ahead.”
The company said that, in light of the results achieved in the first half, the “proven effectiveness of the Yoox business model worldwide and the positive outlook for the online retail market,” it was “reasonable to expect” that the group would “continue to see growth in sales and profits in 2014,” lifted by both business lines and all key markets.
The multibrand business line, which includes Yoox.com, Thecorner.com and Shoescribe.com, saw revenues rise 16.9 percent to 173.9 million euros, or $238.2 million, accounting for 73.1 percent of total sales.
This performance reflected strong growth in the number of orders and a lower average order value mainly due to the depreciation of the main foreign currencies against the euro. This summer, Yoox.com introduced the sunglass category and will launch sportswear in September. During a conference call with analysts, Marchetti noted how sportswear has shifted “from functional to fashionable,” and how sunglasses “still have a limited online distribution.”
Yoox also sets up and manages 38 online stores for leading global fashion and luxury goods brands from Giorgio Armani to Ermenegildo Zegna, and this monobrand channel posted a 9.3 percent increase in sales to 64.1 million euros, or $87.8 million, representing 26.9 percent of total revenues.
Kartell.com, operated by Yoox, launched in Europe in May, with a creative concept designed and developed by the group’s creative agency, while the Sergio Rossi online store was extended to the Chinese market at the end of June.
On Tuesday, Jeanne Lanvin SA and Yoox signed a non-binding letter of intent to finalize a global partnership for the setting up and management of the Lanvin online store. In June, Yoox signed an agreement with Alexander Wang Inc. for the management of the online flagship of the Alexander Wang and T by Alexander Wang brands in the U.S. Underscoring his expectations for this project, Marchetti noted how relevant the American market is for a designer such as Wang. The existing partnership between Yoox and the brand in Europe and Asia, which has thus become global, was also extended until the end of December 2017.
In July, Yoox renewed its partnership with Jil Sander for another five years, while agreements with Coccinelle, Vicini and Bally, together accounting for 1 percent of total sales, will not be renewed after they expire this year. Yoox’s creative Web agency will develop the graphic concept of the new release of fendi.com, scheduled to go live in 2015. The agency will also develop the creative concept for the new release of marni.com following an agreement signed this month.
Asked about best performing brands, Silvia Scagnelli, corporate development and financial communications director, said that labels that are “less selective are more impacted and that those with a high positioning are showing a very brilliant performance.” Marchetti noted that “brands are still learning,” and that, since “the Internet is so strategic now, and decisions are more centralized,” many brands are “reassessing their distribution online.”
Geographically, Italy gained 22.9 percent in the fist half reaching sales of 38.7 million euros, or $53 million, continuing to benefit from the rising contribution of smartphones and tablets. The rest of Europe was up 14.8 percent to 113.7 million euros, or $155.7 million, and North America grew 8.8 percent, or 13.5 percent at constant exchange rates, to 50.1 million euros, or $68.6 million.
Japan rose 5.8 percent but would have gained 18.4 percent at constant exchange rates, to 18.4 million euros, or $25.2 million. Other countries gained 21.4 percent to 12.1 million euros, or $16.5 million, driven by China, which grew strongly in the first half of the year. This performance benefited from the introduction on Yoox.com of a new logistics setup, complementary to that locally available, which since mid-February allows Chinese customers to access not only the local offering available in the Shanghai logistics center, but also the global range of brands based in Italy.
In the first half, capital expenditure totaled 17.2 million euros, or $23.5 million, compared with 20.3 million euros, or $26.6 million, in the same period last year.
Dollar figures were converted from the euro at average exchange rates for the periods to which they refer.
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