LuxExperience reveals YNAP job cuts, but UK, Italy HQs to remain

LuxExperience is continuing to work on the integration of its legacy Mytheresa business and its acquired Yoox Net-A-Porter (YNAP) operations into its group set-up and has announced “significant efficiency and structural improvements”, meaning around 700 job cuts at the latter.

The company said the planned measures are part of its overall transformation plan after acquiring YNAP in April. The changes will be achieved by “simplifying the business and using shared infrastructure where appropriate”. And it added that Net-A-Porter, Mr Porter, Yoox and The Outnet should “regain growth and financial strength after years of decline”.

The plan is “to serve customers better and more efficiently” so “select operational and administrative structures” within the luxury segment (that is, Net-a-Porter and Mr porter), as well as the off-price segment (Yoox and The Outnet) in Italy, the UK, the US and other jurisdictions “will be consolidated”.

That will mean a partial reduction of the workforce across several sites that “may affect approximately 700 employees”.

But that doesn’t mean a mass movement of HQs. The company added that it “remains fully committed to Italy and the United Kingdom as the respective headquarters of its newly acquired store brands”. Italy will remain a long-term operational hub for LuxExperience and the HQ for Yoox, while Net-A-Porter, Mr Porter and The Outnet will still have their HQ in the UK. “The teams in the different brands are integral drivers for returning to growth and financial strength after years of decline,” it explained.

The Germany-based business believes the moves “are a critical part of the overall transformation plan for YNAP that also includes significant investments in future growth through more customer-centricity, marketing spend as well as increased buying budgets, which aim to further solidify LuxExperience as the undisputed leader in global, digital luxury”.

The news is perhaps unsurprising given that acquisitions usually lead to efficiencies and consolidation, and given the lack of profitability at YNAP for some time. That was a situation that first led its former owner, luxury giant Richemont, into what became a long-term process to find a buyer. At one point it had struck a deal with another major name in the luxury e-tail space, Farfetch, to take it on. But that business’s own implosion and subsequent takeover by Coupang derailed that plan.

The takeover of Farfetch by Coupang, the acquisition by Frasers Group and subsequent closure of Matchesfashion, and the purchase of YNAP by Mytheresa’s parent and then its evolution into the LuxExperience Group underlined the problems faced by luxury e-tailers this century.

But it also left LuxExperience in a powerful position. It now owns three of the key luxury brands e-tail brand covering in-season retail, as well as two of those for the high-end off-price segment.

The former MYT Netherlands Parent BV changed its name to LuxExperience in January this year to reflect that status. Since then it has announced a raft of leadership changes at its acquired brands.

The challenges it faces have been very clear this year as the luxury slump has continued but in May, it reported Q3 results for the legacy Mytheresa operation with sales and adjusted EBITDA continuing to improve, although it acknowledged the “tough market environment”.