Net-A-Porter moves into profit after a year of digital innovation
Net-A-Porter today reported record results, with profits moving into the black at £11m after a year of digital innovation and as the upmarket fashion pureplay marked 15 years in business.
Digital 'firsts' notched up during the year included the launch of the NET SET social shopping network, the UK's first Instagram advertising campaign, the launch of shoppable magazine Mr Porter, and a partnership between Mr Porter and the film Kingsman to create the first shoppable film.
Natalie Massenet, founder and chairman of Net-A-Porter, said: "“In the last 15 years, The NET-A-PORTER GROUP has radically transformed the luxury marketplace, combining fashion, technology, e-commerce and content in a unique way. The Group’s pioneering innovation has driven the way consumers interact with luxury, as well as the luxury brands’ approach to e-commerce. It has been an incredible journey, beginning with a concept and turning that initial idea into the world’s premier online fashion destination.
“In today’s world where technological innovation is rapidly changing consumer habits and lifestyles, success in business will no longer be driven solely by the forces of competition but by the power of collaboration; collaboration between retailers and brands, and collaboration between and among consumers. This is where the future of fashion lies, a future we at Net-A-Porter will continue to create."
Her comments came as Net-A-Porter, whose websites also include Mr Porter and The Outnet, reported turnover of £654.1m, 22.8% more than last year's £532.7m, and pre-tax profits of £11m, a turnaround from last year's pre-tax loss of £9.99m. The company is set to merge with Yoox Group in a deal that is expected to complete in September.
During the year 45% of revenue came from Europe, 31% from the US and 24% from Asia and the rest of the world. US sales grew by 27% while UK sales were 24% up on last time. Monthly unique visitor numbers grew by 10.7m in March 2015, while customer orders rose to 2.6m in number.
The company invested £13.8m in IT improvements to its three websites, focusing on mobile and tablets. This helped mobile and tablet sales grow by 46% to represent 35% of overall sales for the year. By the year end that figure had reached 40%. The introduction of alternative payment methods including PayPal and Klarna helped to fuel mobile growth, as did what's believed to be the UK's first ever Instagram advertising campaign: following the campaign Net-A-Porter says it was the first luxury multibrand retailer to reach more than 1m Instagram followers.
Shoppable magazine Porter, billed as bridging "the gap between inspiring editorial content with ecommerce" marked its first birthday, with a circulation of more than 152,000. The company said that 46% of the magazine's newsstand sales were to consumers new to the Net-A-Porter group.
The shoppable Net Set app was launched in 2015, bringing social media, fashion and shopping communities together creating what the company describes as "a first-of-its-kind social environment, allowing luxury brands to actively manage a real-time social dialogue and relationship with Net-A-Porter's customers. The app includes image recognition that allows customers to match an image they like to an item of clothing sold on the website.
The company focused on markets including France, Germany, Hong Kong and the US as well as the UK over the last year. The Net-A-Porter website is being translated into French, German and Mandarin. It also focused on the top-spending customers, using personalisation and an improved customer journey to attract and win shoppers.