MILAN — Italian online fashion retailer Yoox Group SpA on Wednesday said first quarter net profits dropped slightly on the same period of 2013, to 1.1 million euros, or $1.45 million, from 1.2 million euros, or $1.57 million, mainly due to higher depreciation and amortization costs following investments in innovation, technology and in the firm’s distribution platform. Net revenues, at 110.4 million euros, or $145.73 million, jumped 21.4 percent following double-digit sales growth at the company’s multi- and mono-brand businesses as well as strong sales gains in all the firm’s geographic markets.
Dollar amounts have been converted at average exchange rates for the periods to which they refer.
In a statement released after the close of trading in Milan, the company — which sells fashion apparel and accessories directly to buyers through yoox.com, shoescribe.com and thecorner.com and manages online stores for brands including Armani, Diesel and Marni — said it had signed an agreement with Giorgio Armani SpA to handle the creative development of the brand’s new armani.com release, due in the third quarter of 2013.
The agreement, signed on May 7 but revealed Wednesday, concerns the “ideation and the development of the creative concept” for the new site, building upon the technological development and management of the site, as was the case previously.
The Armani deal, which follows a similar deal earlier this year with Italian fashion house Missoni, marks the firm’s successful push into creative work for high-end fashion clients.
In the statement, Yoox said it won the pitch “against competition from major global web agencies. Thanks to its in-house team, Yoox’s offering to the major fashion and luxury brands is therefore enhanced by a proposal that combines creative excellence with thebest e-commerce practice.”
The firm also said that it agreed a two-year extension — through all of 2017 — with Renzo Rosso’s Only the Brave (OTB) group for management of the masionmartinmargiela.com property. OTB produces the Diesel brand, among others. Yoox and OTB recently renewed the diesel.com site management contract for a further six years, Yoox said, adding that the two groups will “focus on operations in Europe and Japan and the online store will, potentially, be extended to China.”
Yoox added that the two companies “jointly decided to discontinue” operations at diesel.com’s U.S. operations at the end of 2013. The sales from the site represented “approximately 2%” of Yoox sales in 2012, the internet retailer said, however the site’s average order value was “significantly lower than the average for the mono-brand business line in the country.”
Overall, the group reported that its average order value in the first quarter of 2013 increased to 211 euros, or$278.54, from 199 euros, or $260.7.
In terms of business units, Yoox said that its multi-brand sites generated total net sales of 79.0 million euros, or $104.28 million, in the first three months of the year, up from 63.8 million euros, or $83.6 million, in the year-ago period. The sales growth was boosted by innovations included in new site releases and “from solid sales in China,” as well “a brand portfolio with an ever-higher positioning” at thecorner.com, Yoox said.
The mono-brand business unit — which includes the set-up and management of online stores for leading global fashion and luxury brands — saw its revenues increase by 15.7 percent on the year-earlier period. Revenues totaled 31.4 million euros, or $41.45 million in the first quarter.
All geographic markets — including Italy — posted double-digit sales gains, Yoox said.
North America remained the online retailer’s leading market, with revenues of some 22.9 million euros, or $30.23, representing nearly 21 percent of total group sales, an almost 17 percent increase on the year-earlier period.
In its statement, the company said that “in light of the positive results posted in the first quarter of 2013, the performance of online retail, the proven effectiveness and uniqueness of the Yoox business model, it is reasonable to expect that Yoox Group will continue to increase its revenues and profits in 2013.”
Yoox said it will continue to make investments targeted at servicing the “future sustained growth of the group” even as it continues to follow “internal initiatives to improve efficiency and ensure tight cost control.”