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YNAP Business 'Strong, Robust and Solid' Says CEO

Chief executive Federico Marchetti said revenue at Yoox Net-a-Porter this year will grow in the lower part of the expected 17 to 20 percent range due to logistics delays at The Outnet.
Yoox Net-a-Porter Group | Source: Courtesy
By
  • Reuters

MILAN, Italy — A "bump in the road" will push Yoox Net-a-Porter's (YNAP) revenue growth this year to the lower end of its guidance range, the luxury online retailer's chief executive said on Wednesday.

The e-tailer, which runs four different websites as well as online flagship stores for famous fashion brands such as Armani and Valentino, has set a goal to increase revenue annually by 17 to 20 percent at constant exchange rates in the years to 2020.

Chief executive Federico Marchetti said the transfer of products between different warehouses for The Outnet — one of the group's e-shops — was slower than expected, impacting the availability of items and triggering a €20 million ($23 million) loss for the full-year.

"We just had a very small bump in the road ... it happens, just like when you move houses," Marchetti told Reuters in an interview ahead of the group's third-quarter results.

He underlined that the issue was a "one-off," with no knock-on effects for future years and that product availability for The Outnet would be restored by the end of November.

Marchetti said this year's EBITDA (earnings before interest, taxes, depreciation and amortisation) would grow from last year while EBITDA margins would be "broadly in line" with 2016. In August the group said it expected core profit margins to improve this year.

The chief executive confirmed the group's revenue growth guidance to 2020, saying that the business was "strong, robust and solid."

In contrast, consultancy Bain & Co has forecast 4 to 5 percent yearly sales growth for the next three years.

The retailer, whose shares are up just over 20 percent since the beginning of the year, has weathered the luxury sector's slowdown in recent years. It has signed new partnership agreements as well as broadening its product range to include expensive watches and jewellery.

The most expensive item sold in the last quarter was a £58,000 ($76,000) necklace, the company said.

Marchetti said that the group did not have specific sales targets for its own newly-launched menswear label 'Mr P' but said there were "big expectations" for it.

YNAP also plans to create its own label to sell on Yoox and these in-house products are expected to represent 10 percent of the group's off-season revenue by 2020.

The group — which last year signed a €130 million joint venture with Dubai-based billionaire Mohamed Alabbar — launched its Yoox website in the Middle East region ahead of schedule.

"Middle East will be one of fastest growing markets, along with China, if not the fastest growing market [for the group]," Marchetti said.

By Giulia Segreti and Claudia Cristoferi; Editors: Valentina Za and Elaine Hardcastle. 

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