Wayfair is exiting Germany, where it has operated for 15 years, after failing to turn the company “into a household brand” in the market, according to a letter from Co-founder and CEO Niraj Shah.
The shuttering of its German operations will result in the loss of approximately 730 jobs in the country, about 3% of Wayfair’s global workforce, CNBC estimates. Germany was one of the first markets Wayfair entered in Europe, along with the UK; however, Shah said that over the years the brand’s success in the UK outpaced that in Germany. The company made a final push last year to boost its German business, but those efforts were thwarted by “weak macroeconomic conditions for our category in Germany, the lower maturity of our offering, our current brand awareness and our limited scale,” said Shah.
“In our recent assessment, we concluded that achieving market-leading growth in Germany still remained a long and costly endeavor, and one that is increasingly lagging the potential return we see in other areas,” added Shah. “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.”
Those reallocated efforts will now focus on markets where the company believes it has a better opportunity to achieve the level of success it has in the U.S., including Canada, the UK and Ireland. Globally, Shah said Wayfair plans to move forward with a range of initiatives launched last year, including:
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- Optimizing its marketing reach after a branding refresh that was rolled out in April 2024;
- Expanding its physical retail footprint following the opening of its first large-format store in Illinois in May 2024;
- Growing the new Wayfair Rewards loyalty program, which debuted in October 2024; and
- Building out the Wayfair Verified program, a quality mark for the site’s top-selling products indicating that they meet quality, value and customer satisfaction standards.
Wayfair’s German exit marks the latest in a series of streamlining moves at the online furniture brand. In November 2024, COO Thomas Netzer stepped down, and his role was integrated into that of current Chief Commercial Officer Jon Blotner. In late 2022 and early 2023, Wayfair also underwent a right-sizing initiative that included layoffs of 10% of its global workforce, with the goal of cutting $1.4 billion in costs.
In results for Q3 of 2024 reported on Nov. 1, 2024, Wayfair saw strong profitability and market share gains, with a non-adjusted EBITDA of $119 million on the back of $2.9 billion in revenue. However, the company still reported a net loss in the quarter of $74 million, and active customers decreased 2.7% year over year, indicating the need for continued work ahead.
