US-based online furniture retailer Wayfair is withdrawing from the German market, impacting hundreds of jobs in the country.
The decision comes as the company navigates the lingering effects of the Covid-19 pandemic and reassesses its market positions.
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Wayfair CEO and co-founder Niraj Shah said in a memo to employees: “Germany has been an important part of our journey for the past 15 years, serving as one of our original entry markets into Europe, alongside the UK.
“Over the years our success in the UK outpaced our success in Germany, as we were able to develop a household brand in the UK and grow our market share there, all while developing strong unit economics.
“Our Germany efforts lagged, but we set out to close that gap over the last year.”
The retailer has cited several reasons for this exit, including adverse macroeconomic conditions specific to its sector in Germany, the nascent stage of its operations, limited brand recognition and insufficient scale within the country.
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By GlobalDataShah added: “In our recent assessment, we concluded that achieving market-leading growth in Germany still remained a long and costly endeavour, and one that is increasingly lagging the potential return we see in other areas.
“To ensure we align our resources with initiatives that can deliver the greatest impact, we made the difficult but necessary decision to reallocate efforts to areas with strong long-term potential where our current efforts are showing great progress.”
Wayfair has not disclosed the specific impact of the decision on its workforce, but Reuters reports a planned 730 redundancies.
Wayfair is committed to providing affected employees with a robust support package including severance pay and employee assistance programmes. Detailed individualised information will be shared with those impacted.
Post-exit, Wayfair’s strategic focus will shift towards bolstering its operations and investments in other international markets such as Canada, the UK and Ireland. The company is confident about these regions’ potential to emulate its US success story.
The retailer is also expanding its physical retail presence, enhancing marketing efficacy, growing its loyalty programme – Wayfair Rewards – and further developing the Wayfair Verified programme as part of its global initiative.
Wayfair continues to invest in technological advancements as a priority to ensure innovative and seamless customer experiences that resonate with its brand promise of helping customers create their perfect home environment.
