Wayfair, an early e-commerce disruptor, wants to focus more on physical retail and has decided to exit the German market and cut 730 jobs as a result.
The online home goods company wants to reprioritize investments and sees a better return on other initiatives, such as physical retail, finance chief Kate Gulliver told CNBC.
"Scaling our market share and improving our unit economics in the German market has proven challenging due to factors such as the weak macroeconomic conditions for our category in Germany, the lower maturity of our offering, our current brand awareness, and our limited scale," wrote Shah. "We're not doing this because we're saying that we need some, you know, cost efficiency play, and so therefore we had to look for more costs and we identified Germany," said Gulliver. "We see better ROI initiatives that we are already further along on that we can continue to invest in. So it's an investment prioritization, and going after areas like the U.K., Canada, etc. where we see a really exciting opportunity.
Still, physical retail can be a massive capital expenditure. And Wayfair hasn't turned an annual net profit since 2020.
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