Is Yoox's Strategy a Little Farfetched?
In 2015, Federico Marchetti became CEO of the largest luxury online retailer in the world, after orchestrating the merger of Yoox Group with Net-a-Porter Group. Two years later, in 2017, the financial community was expecting him to deliver results. However, the new combined 1.8 billion company was not growing as fast as it used to, and questions remained about the synergies that could be achieved between two companies with very different business models. Moreover, a new threat had emerged. Farfetch, a luxury platform that aggregated the inventories of over 500 luxury boutiques all over the world, had become the new unicorn of the industry. After less than ten years of operations, it had reached $800 million in sales in 2016, with a staggering 70% year-on-year growth. What could the Yoox group do in order to foster growth, stave off threats like Farfetch and improve its margins?