Digitizing Luxury - Growth, Profitability, and Financial Flexibility at YOOX: Case Study for Graduate Level

Abstract

YOOX was one of the first companies that succeeded to get the reluctant luxury goods retail segment on board with the idea of online commerce. Started in Italy, it quickly expanded throughout Western Europe, North America, China, and Japan, with explosive annual sales growth rates of over 20% in the last four years. How did the company finance this growth and how sustainable is this growth rate?

Learning objective This case study is intended as a refresher tool for financial reporting and analysis oriented primarily towards the analysis of working capital, solvency, liquidity and growth. After discussing this case study, students will better understand the importance of working capital management, assess the usefulness of various measures of solvency and liquidity, and recognize the limits to organic growth.

Audience Graduate level/Executive Education/MSc/MBA

Keywords: educational case study; teaching; financial statement analysis; working capital; liquidity; profitability; growth; organic growth; financial flexibility; working capital management; YOOX; return on equity

JEL Classification: M41; G32; A23; M49; G39; A29