While other luxury retailers continue to slide, Net-a-porter reported strong growth in 2008 and the first three months of this year.
For the year ended Jan. 31, pretax profits more than tripled to 10.1 million pounds, or $18.3 million, on a 47.8 percent increase in sales to 81.5 million pounds, or $147.6 million. This compares with pretax profits of 3 million pounds, or $6 million, on sales of 55.2 million pounds, or $110.5 million, a year earlier. Currency conversions were made at average exchange rates for the respective periods.
In the report filed by the privately held company to Companies House, Net-a-porter said revenues for the first 13 weeks of this year were up by 45.3 percent.
“We’re benefitting from being an online business,” said chief executive officer Mark Sebba. Other factors contributing to the company’s success were a major redesign last year and new categories, designers and exclusive merchandise. Notable additions were bridal, lingerie, Lanvin, Givenchy and exclusive collaborations with Alexander McQueen and Roland Mouret. The redesign made the site easier to shop and introduced boutiques organized by style such as Salon and Cutting Edge. The company also strengthened its underlying e-commerce infrastructure to handle more customers globally.
Near the end of the year, the company averaged around 1.8 million visitors a month and 3.3 million page views a day. Because the company is based in the U.K. and ships to about 170 countries, it has been less dependent on the hard-hit U.S. market than some luxury retailers.
“In the U.S. we have always had a year-on-year increase, but [after the October crash], the increase slowed, so we quite clearly weren’t seeing the same volumes in the U.S. as we’ve been seeing in the rest of the world,” said Sebba. “Sales in other regions have continued to be strong and we’ve continued to pursue our marketing activities in the U.S., and we do think that in particular the collections we’ve had and the brands we’ve been featuring have been particularly strong. A number of our competitors had slowed their buying activities last year, and we continued to maintain the quality of our offerings.”
The company now has about 420 employees and is continuing to hire.
The company’s gross profit percentage decreased slightly to 48.3 percent of sales from 48.9 percent. More significantly, administrative costs fell from 38 to 32.4 percent, reflecting economies of scale as the company was able to grow its top line without greatly increasing overhead.
TheOutnet, a separate site for sale and off-price merchandise that launched in April, is doing well. “We’re trading ahead of budget overall,” said Sebba.