Net-a-Porter Is Already Profitable by Its Own Measures

Fiscal 2014/2015 was a time of growth for Net-a-Porter in many ways.
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Dhani Mau
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Fiscal 2014/2015 was a time of growth for Net-a-Porter in many ways.
Natalie Massenet at the launch of The Net Set, Net-a-Porter's mobile-based social network, earlier this month. Photo: David M. Benett/Getty Images

Natalie Massenet at the launch of The Net Set, Net-a-Porter's mobile-based social network, earlier this month. Photo: David M. Benett/Getty Images

Yoox chose the right time to enter into a merger with Net-a-Porter. After losing millions of pounds for years, the London-based e-commerce conglomerate finally became profitable during the 12 months ended March 31.

You might recall that just last month, we reported that the Net-a-Porter Group (which includes Net-a-Porter, The Outnet and Mr Porter) was still in the red, costing its former parent company, Richemont, £2 million (about $3.1 million) in the 2014/2015 fiscal year.

But according to figures published by Net-a-Porter on Friday, Net-a-Porter actually posted a net profit of £1.8 million ($2.9 million) after tax and £11 million ($17.1 million) before tax in the 12 months ending March 31. A source familiar with Net-a-Porter's finances tells us that goodwill expenses, which are included in Richemont's reports but not Net-a-Porter's, are the reason for the discrepancy between the two figures.

A profit of £2 million might not seem substantial for a company as large and well-known as Net-a-Porter, but it's an impressive achievement for a company that cost Richemont £12 million ($18.6 million) in the 2013/2014 fiscal year, and £27 million ($41.9 million) in the 2012/2013 fiscal year.

According to Net-a-Porter's filing, the company's sales were up 22.8 percent for the year, with the strongest growth shown in the final quarter, during which sales increased 33 percent. Profit margins also increased from 44.1 percent to 45.3 percent, the result of selling more product at full price than it had the previous year.

While the Group's shift into the black is certainly significant, the filing reveals some other fascinating growth numbers. For instance, monthly unique visitors between all three sites grew to 10.7 million. Total customers (meaning they've purchased something within the past 12 months) grew from 698,000 to 887,000 — a 27 percent increase. Average order value for the group decreased slightly from £404 to £391, while orders for Net-a-Porter specifically are £506 on average. Meanwhile, mobile and tablet sales increased by 46 percent and now make up 40 percent of the group's overall sales. In total, the company had 2.6 million orders last year. 

The company's year-old print magazinePorter, has a circulation of 152,000, and can be found at 25,000 points of sale. The glossy helped drive a 77 percent increase in advertising revenue, and the company found that 46 percent of newsstand purchases were made by people who hadn't previously shopped at Net-a-Porter, meaning its potential to bring in new customers is promising.

More fun facts: Europe and the U.S. make up most of the Group's revenue, at 45 percent and 31 percent, respectively. Those markets grew by 24 percent and 25 percent, respectively.

Net-a-Porter's deal to merge with Yoox is expected to be complete by September.