THE TIMES UK
‘As a teenager I came up with many ideas.’
by Deidre Hipwell, December 23, 2017
Photograph by John Nguyen
Helping to save Africa from starvation by mass producing mozzarella-style cheese from the milk of wildebeest is a novel approach to dealing with hunger. Intriguing it may be, but the idea has never come to fruition because it turns out that milking a wild antelope is every bit as difficult as you might imagine. Federico Marchetti is well aware of this. The chief executive of Yoox Net-a-Porter, the online luxury fashion retailer, once considered the production of wildebeest mozzarella as a potential business opportunity.
“When I was a teenager I always wanted to have my own company and come up with the idea of the century,” he said. “So I came up with many ideas. Some were good ones and some were crazy, like making mozzarella from wildebeest. It would have saved a lot of people but it is not easy to make it. The problem is you cannot milk them because they are wild.”
Mr Marchetti, an Italian born to a middle-class family in Ravenna, did not let his failure to conquer the African savannah get him down. Instead he went on to found the online company, Yoox, which has helped to revolutionise the exclusive world of luxury retailing. In 2015 Yoox merged with Net-a-Porter, its British ecommerce rival founded by Natalie Massenet, in a £950 million deal that created the world’s largest online fashion portal group.
Two years on from the merger the enlarged company has headquarters in Milan and London and sells everything from designer blouses and dresses to bespoke suits, diamond necklaces and the world’s most expensive watches. The group’s four standalone websites — Net-a-Porter, Mr Porter, Yoox.com and the Outnet — have more than three million active customers, including ones dubbed “extremely important persons” who spend more than €1 million a year and start planning their expensive Christmas “wish lists” with their personal shoppers as early as September. Such is the demand for luxury goods online that the group recently sold a £118,000 watch and a £58,000 necklace.
The Milan-listed Yoox Net-a-Porter also operates online outlets for many luxury retailers including Valentino.com and Yves Saint Laurent and last year had turnover of nearly €2 billion. The group has set a target of doubling the size of the business by 2020. “My business plan from the beginning was always to be the global ecommerce partner for the leading fashion brands,” Mr Marchetti said. “It has been tough and challenging integrating the cultures [of Yoox and Net-a-Porter]. It was a very big job and it took 12 to 15 months to do it, but now I can say, ‘We have made it’: it really is one group working together.”
Mr Marchetti’s evident happiness that Yoox Net-a-Porter is working is more than simply satisfaction with a job well done; it also betrays a sense of quiet relief. A month before the transaction had been completed in late 2015 it seemed as if the merger was already going wrong when Ms Massenet suddenly resigned. She was meant to become executive chairwoman of the enlarged group. Instead she departed a few months after Mr Marchetti had claimed in an interview that there would be “only one boss” of the enlarged group and after an independent arbiter had valued Net-a-Porter at between £1.3 billion and £1.5 billion, about £500 million more than its Swiss luxury owner, Richemont, had agreed to sell it for.
Richemont, chaired by Johann Rupert, had gained majority control of Net-a-Porter from Ms Massenet in 2010 in a series of transactions which are said to have netted her more than £100 million. The arbiter’s ruling was a victory for minority shareholders, including Ms Massenet.
The fighting behind the scenes seemed to justify every stereotype about the cut-throat, catty world of fashion. Mr Marchetti, whose father was a Fiat warehouse manager and mother worked for Telecom Italia, claimed that the reality was far less dramatic and was now a distant memory. “They [Richemont and Ms Massenet] solved their own issues and the only thing I can say is that Mr Rupert has always been a great gentleman and a very generous man.
“For me it was a surprise [when Ms Massenet resigned] as she was supposed to be embracing the merger and I didn’t expect it. I was sad at the beginning as I was really looking forward to working with her.”
Mr Marchetti said he remained 100 per cent sure that the merger was the best thing the two companies could have done, particularly when ecommerce had become a “business of scale” requiring substantial investment. Yoox Net-a-Porter plans to put €750 million into technology and logistics by 2020 and this year opened a technology hub in White City, West London, that mirrors one in Bologna. “The two companies, as standalone businesses, would have struggled sooner or later. But together we can afford this big investment to make a stable, solid business that is built to last.”
Mr Marchetti said that Yoox Net-a-Porter, which buys products directly from the designers upfront and takes on the risk associated with holding the stock, had attracted many new brands. It also became the first platform to start selling “hard luxury”, or expensive fine jewellery and watches, online last July.
Mr Marchetti has mixed things up since 1999 when he quit Lehman Brothers aged 29 to launch Yoox, just before the dotcom bubble burst. He established Yoox with funding from Kiwi, an Italian venture capital company that he came across in the Yellow Pages.
Mr Marchetti, who was awarded a Cavalieri del Lavoro, an Italian knighthood, in June, said that the full potential of Yoox Net-a-Porter had yet to be realised. “Luxury retail is growing about 3 to 4 per cent a year and online luxury is growing at 15 per cent,” he said, seemingly unfazed by the emergence of fast-growing rivals such as Farfetch and Lyst. Online luxury is only 8 per cent of the total luxury market so there is a lot of room for growth and for many players.”
Europe and North America are Yoox Net-a-Porter’s largest markets but higher-growth sales are likely to come from China and the Middle East.
Mr Marchetti said that from an early age he had always thought about fashion (that is, when he was not trying to solve hunger in Africa). “I once bought a pair of big orange boots when I was 13 in Ealing [west London]. I thought, ‘You know they are so ugly, they could be beautiful.’ They were Timberland boots and three years later Timberland was a big trend in Italy. I like to spot trends, that is my instinct.”
Who is your mentor?
Franca Sozzani, the late editor of Vogue Italia. We did many things together for young designers. Also Bill Gates.
Does money motivate you?
Money is not the main driver for me. I want to build a company to last.
What are the most important events in your working life?
There are three: when I got the first funding to launch Yoox from Kiwi given that, at the time, I was broke and jobless; when I sold the first item on Yoox; and then, of course, the merger with Net-a-Porter.
Who do you admire the most?
Federico Fellini, the film director. He won an Oscar for Amarcord in 1973, which was lost in the archives, and Yoox recently restored the film to honour his legacy.
What is your favourite TV programme?
I am not a big TV watcher. I love movies and the cinema. I loved Call Me By Your Name, directed by Luca Guadagnino.
What does leadership mean to you?
Being brave and having courage is very important as is leading from the front and by example.
How do you relax?
I love water, I was born by the sea. I relax the most by swimming with my six-year-old daughter Margherita.
February 21, 1969, Ravenna, Italy.
Bocconi University, Milan, economics degree; Columbia University, US, MBA.
1996 analyst, Lehman Brothers; 1999 founded Yoox; 2015 merged Yoox with Net-a-Porter.
One daughter with partner, Kerry Olsen.
Originally published in The Times