Yoox Net-a-Porter Group unveils five-year strategic plan
Yoox Net-a-Porter Group has outlined its five-year strategic plan at its Capital Markets Day, which puts mobile at the centre of the business and includes the introduction of fine jewellery and watches and an own-brand label from its multi-brand men's site Mr Porter. Brexit is not expected to have a long-term impact on its plan, the group said.
The Italian group, which is the parent of NET-A-PORTER.com, Mr Porter, THE OUTNET and YOOX, said in its presentation today that it plans to outpace the online luxury market growth over the next five years and will "lead the mobile revolution".
Key points from the plan, unveiled at a presentation today (6 July) include:
- - strong annual net growth of between 17-20%
- - increased adjusted EBITDA margin to a range of between 11-13% (compared to current 8%)
- - CAPEX reduction to between 4-5% of net revenue by 2020
- - positive free cashflow generation from 2018
Following its acquisition of the Net-a-Porter Group last year, Yoox is now divided into three distinct operational divisions: Multi-Brand In-Season (Net-a-Porter, Mr Porter), Multi-Brand Off-Season (Yoox, The Outnet) and Online Flagship Stores (the sites it runs for major luxury brands such as Armani, Alexander Wang and Karl Lagerfeld).
The strategic priorities for Multi-Brand In-Season are:
- - Strong growth in its High Net Worth customer base: In-season has developed a "unique know-how in terms of targeted customer acquisition" with expert Personal Shopping and Client Relations teams applying sophisticated CRM strategies and leveraging the communities of existing customers;
- - International expansion: while consolidating its position in the US, accelerating growth in the Middle East, and advancing its position in Europe, In-season will leverage YOOX’s "localisation expertise" to capture the market potential in the Asia Pacific region;
- - Enriched personalised service driving customer engagement and retention through: dedicated personal shoppers for most valuable customers, style advice delivered through sophisticated native apps, data-driven CRM and enriched one-to-one geo-localised editorial content and product recommendations;
- - Highly curated product offering enriched with the introduction of Mr Porter’s own label and Fine Jewellery & Watches, an under-penetrated category with great potential online, estimated to reach €100m in sales by 2020.
Key strategic priorities for Multi-Brand Off-Season are:
- - Strong growth in high-value customer base through increased efforts in building brand awareness: YOOX will focus on expanding awareness and driving engagement through a more balanced mix between performance marketing and brand building and advertising initiatives;
- - Increase in engagement and loyalty driven by personalised mobile propositions;
- - International expansion: THE OUTNET will unlock its considerable untapped growth potential around the world benefiting from YOOX’s localization assets and expertise. Both brands will expand their reach through a full in-country presence in the Middle East;
- - Growth in product offering: THE OUTNET will expand its mostly ready-to-wear offer with increased penetration of best-selling categories such as shoes and bags and the addition of active wear;
- - Private label to near 10% of Off-Season net revenues by 2020: Growing share of sales through introduction of private labels on YOOX and strengthened offer of Iris & Ink (THE OUTNET's own label).
For Online Flagship Stores, the group outlined the following priorities:
The Online Flagship Stores business line will empower digitally ambitious brands to fully capture the omni-channel retail opportunity. The addition of unique value-added services will complement the e- commerce suite:
- - data insights leveraging the Group’s unique "luxury ecosystem",
- - native apps services,
- - creativity and digital projects,
- - editorial content and,
- - tailored customer service.
With a focus on fewer bigger partnerships and upcoming fashion stars, the Online Flagship Stores offering will leverage its proximity with the In-Season teams to "foster innovation" to the benefit of brand partners, notably in the area of high-end customer service and content.
On the potential impact of Brexit the group said it had "anticipated a range of growth forecasts reflecting a variety of macroeconomic scenarios, including the potential impact of Brexit".
"The Group enjoys well-balanced GBP-denominated costs and revenues, and therefore the impact of a depreciation of the GBP against the Euro on profitability is expected to be neutral in 2016 and onwards," it said, adding that it was fully committed to its presence in the UK and was expanding its London HQ.