When the fashion hordes move on to the Paris show on Wednesday, they will be joined by a figure who is both ubiquitous yet, by the standards of the ego-driven industry, barely visible. Federico Marchetti is chief executive of Yoox Group, the Italian technology company that has become one of the most powerful behind-the-scenes players in the world of on-line luxury. As well as selling luxury goods through its own online stores, Yoox has become the partner of choice for operating so-called mono-brand stores on behalf of some of the biggest names in the business, from Valentino and Armani through Pringle to Alexander Wang.
Yoox serves 101 countries in 11 languages and has offices in Shanghai, Tokyo, Europe, and the United States. It had 2011 revenues of €300m, and first-half revenues of €172.9m this year, an increase of 31.7 per cent over the same period last year. First-half net profit fell 26 per cent to €2.2m, however, dragged down by increased investment and higher interest rates. In 2009 Mr. Marchetti took Yoox public, in the only Italian initial public offering of that year. The shares were priced at €4.50. They closed on Monday at €10.49. He retains 11 per cent of the company.
Rodrigo Bazan, president of Alexander Wang, says: “If you want a global e-commerce operation, there’s simply no alternative.” Increasingly, luxury brands do want global e-commerce operations. Online luxury sales amounted to €6.2bn in 2011, according to a report by Italian luxury goods association Altagamma and the consultancy McKinsey. They are estimated to reach €15bn by 2016, with China outpacing the United States. “Between the logistical issues, taxes, customer service, and fraud, global e-commerce is incredibly complicated. To do it yourself for a brand is almost impossible,” Mr. Bazan says. Mr. Marchetti, 43, conceived his business in 1999 when he was a junior consultant at Bain & Co in Milan. He wrote a plan for a new company that would ‘be a global e-commerce partner for leading luxury brands.’
Scott Galloway, the founder of the digital think-tank L2, notes that so many brands working with one web company creates a risk of sameness in the long term. But Mr. Marchetti points out that, unlike most outsourcing arrangements, Yoox works on a revenue-share model. It takes a percentage of sales for each site it administers as opposed to a management fee, meaning it has a vested interest in increasing revenues for the brands it works with.
It is an anomaly in the fashion world for one company to work with so many competing houses. Armando Branchini, president of Altagamma, attributes Mr. Marchetti’s position to the fact that, “in a world full of monstrous egos, he has no ego.” Mr. Marchetti says: “I think it is much better to be invisible than visible.”
