Industry

What this week’s Net-A-Porter/Yoox and Jimmy Choo results tell us about selling luxury online

The Yoox/Net-A-Porter business and Jimmy Choo both published financial results this week, while FarFetch appointed Net-A-Porter founder Natalie Massanet to its board. We took a look at these stories to see what they told us about selling luxury online.

Luxury still sells
The multi-brand in-season division – which includes Net-a-Porter [IRDX RNAP] and Mr Porter [IRDX RMRP] – remains the largest part of the Yoox/Net-A-Porter group. This part of the retail business which is most likely to sell goods at full price remains the largest part of the group, with 51.8% of sales in the latest year. Here sales grew more slowly than in other parts of the business. Sales €968.6m were 8.4% ahead of the same time last year. Overall, the Yoox Net-A-Porter group turned over £1.8bn in 2016, 12.4% more than the previous year. Fourth quarter sales of £538.2m were 11.4% ahead of the same time last year.

The rise of the standalone brand
The smallest but fastest-growing part of the Yoox/Net-A-Porter business, according to these results, is the online flagship stores that it develops and operates for third-party luxury brands. Sites including armani.com, valentino.com and chloe.com contributed revenues of €205m in the year to December 31, 2016, 17.1% up on the same time last year. They will be joined by isabelmarant.com in 2017. In the Christmas quarter of the year alone, revenues from this business segment of €74.3m were 27.4% up on the same time last year.

Luxury shoe brand Jimmy Choo, meanwhile, reported group sales of £364m in the year to December 31, 1.6% up on the previous year. Retail sales of £243.9m were up by 17.4%, although like-for-like sales, which strip out the effect of store openings and closures, were 0.8% down compared to the same time last year.

Discounting pays
Off-season multi-brand websites, such as The Outnet, were a strong earner for the Yoox/Net-A-Porter business in its latest financial year. Sales of €696.8m were 16.8% ahead of the same time last year.

Seamless customer experience
Yoox/Net-a-Porter emphasise the importance of the “seamless customer experience across online and offline”. Ultimately, it says, this will “deliver the next generation of omnichannel engagement”, and comes through “service and platform enhancements” that were implemented during 2016. Among them, The Outnet put the emphasis on a more mobile-friendly interface, and launched its first Android native app.

Jimmy Choo says it is continuing to invest in digital “to enable us to reach both new and existing clients in the most relevant way”. Online sales accounted for 6% of revenue during the year.

Farfetch, which enables online sales for luxury boutiques, this week appointed Natalie Massenet, who founded Net-A-Porter in 2000 before it was subsequently sold to Richemont and since then merged with Yoox, as its non-executive co-chairman, alongside Farfetch chief executive and executive co-chairman Jose Neves.

They say they share a strategic vision of how fashion and technology can work together to “amplify the consumer experience”.

Massenet said: “What Farfetch has done to rewrite the rulebook on how technology can work alongside bricks and mortar to elevate the customer experience stands out in the industry – when Jose asked me to come on board it was an opportunity I couldn’t turn down. Jose is a true innovator, and I am thrilled to join him as he grows Farfetch into the online platform of choice for luxury fashion.”

Focus on content
At the Yoox/Net-A-Porter group, shoppable Porter print magazine reached a circulation of 180,000 copies in 60 countries in January 2017; paid subscriptions were 30% up on last time. Mr Porter introduced The Daily, with style and trend updates. Luxury lifestyle tips and inspiration from “elite influencers” are included in the new-look The Style Council, while the Mr Porter Apple TV App is billed as a first for luxury content and commerce, since it allows customers to buy from its video content.

Jimmy Choo said that high profile product placements were paying off for it. “Our Japanese business saw a particular benefit from brand and product exposure on the TV drama ‘Seisei Suruhodo, Aishiteiru’, based on characters working in the luxury industry,” it said.

It also said: “Our social media following continues to grow alongside our brand recognition and we have seen growth across all channels. This engagement, in particular with the ‘millenial’ generation, complements our continued success in growing and strengthening our editorial impact in traditional media.”

Mentioned in this piece…

Net-A-Porter

Net-A-Porter

IRDX: RNAP

Net-A-Porter is a UK-based international online retailer of upmarket fashion items. (more…)

Mr Porter

Mr Porter

IRDX: RMRP

Mr Porter is a global online retail destination for men’s style. Editorial content sits alongside the latest products from more than 170 of the world’s leading designers. (more…)

One thought on “What this week’s Net-A-Porter/Yoox and Jimmy Choo results tell us about selling luxury online

  1. Pingback: From Jimmy Choo to Net-A-Porter and Gear4Music: multichannel success strategies - InternetRetailing

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