MILAN, Italy — Yoox Net-a-Porter Chief Executive Officer Federico Marchetti is stepping down from his position at the Richemont-owned luxury e-commerce retailer, according to an internal document viewed by BoF. A successor has not been announced.

Marchetti will remain chairman of the company, which he has led first as off-season fashion retailer Yoox since it launched in 2000, and then after it merged with women's fashion site Net-a-Porter in 2015. Richemont, previously a controlling investor, fully acquired the business in May 2018 in the hopes of beefing up its e-commerce bonafides. It was then valued at €5.3 billion (about $5.9 billion).

However, the company has struggled in recent years, losing money for Richemont and falling short of a €4 billion revenue target this year, BoF reported in November. In 2019, a technology and logistics platform migration that cost hundreds of millions of dollars made elements of YNAP-owned off-price site The Outnet more difficult for shoppers to use and has yet to be completed. In its fiscal report for the year ending March 2019, Richemont registered a €165 million ($182.3 million) write-down of YNAP. The group also reported its weakest profit margin in more than a decade.

“[A]s planned with Richemont, we are in the early stages of implementing a succession plan for the next CEO of YNAP, with me staying on as Chairman to ensure a smooth transition and set the new CEO up for success,” said Marchetti in a memo sent to staff on Wednesday. “There will be no changes in the way we operate for the time being — hence, it is very much business as usual for us all.”

Internally, speculation has grown for months that Marchetti might step down this year, with a succession plan tied to the company’s 20th anniversary in June, according to people familiar with the situation.

Online luxury multi-brand retail is a challenging and competitive business, as players like MatchesFashion and Farfetch fight for market share with discounts and costly customer service offerings.

In the six months ending September 2019, Richemont’s Online Distributors unit (which includes YNAP and secondhand-timepiece seller Watchfinder) lost €194 million ($216 million). In the following quarter, Richemont attributed limited sales growth to “an increasingly competitive pricing environment in online retail and disruption” caused, in part, by damage to a new logistics hub in Italy that was used by Mr Porter, YNAP’s men’s site.

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