2013 Sustainability Report 4 Sustainability Report 2013 Contents

2013 SUSTAINABILITY REPORT 4 SUSTAINABILITY REPORT 2013 CONTENTS

INTRODUCTION Highlights 8 Chairman’s letter to the Stakeholders 11 Guide to the Report 12 YOOX Group Sustainability Policy 15 Targets for improvement 17

1. Identity 1.1 YOOX Group’s profile and its activities 22 1.2 Mission, values and principles 30 1.3 Reference market 32 1.4 Key sustainability issues and relations with Stakeholders 33 1.5 Corporate governance 36

2. Market 2.1 Economic performance 46 2.1.1 Economic and financial highlights: key aspects 46 2.1.2 Creating and distributing value 48 2.2 Customer relations 50 2.2.1 Managing Customer relations 50 2.2.2 Services designed to provide an innovative and exclusive 54 shopping experience 2.2.3 Focus on the Customer in the shopping process 61 2.3 Partners 68 2.3.1 Managing relationships with mono-brand online store Partners 68 2.4 Suppliers 70 2.4.1 Sustainability of Suppliers’ relationships 70 2.4.2 Focus on product quality and sustainability 71 2.5 Shareholders and Lenders 73 2.5.1 Protection of Shareholders and the financial community 73 2.5.2 Relations with Lenders 83 SUSTAINABILITY REPORT 2013 5

3. People 3.1 YOOX People 86 3.1.1 Human resources management 86 3.1.2 Breakdown of workforce 87 3.1.3 Hiring policies 89 3.1.4 Diversity and well-being 92 3.1.5 Compensation policy and incentive and appraisal schemes 94 3.1.6 Development and training policies 97 3.1.7 Workplace Health and Safety 100 3.1.8 Industrial relations 102 3.1.9 Internal communication 102

4. Community 4.1 The Community, the Local Area and Government Authorities 106 4.1.1 YOOX and its relations with the Community 106 4.1.2 Relations with Organisations, Institutions and Industry Associations 111

5. Planet 5.1 YOOX and the Environment 116 5.2 Energy Management 118 5.2.1 Energy consumption and atmospheric emissions 118 5.2.2 Energy efficiency and reducing consumption 120 5.3 Environmental policy and sustainable conduct 126 5.3.1 Environmental impacts of mobility 127 5.4 Management and use of resources 129 5.4.1 Purchasing and consumption of paper 129 5.4.2 Water consumption 130 5.4.3 Waste 130 5.5 YOOXYGEN and Eco-mmerce: the environmental responsibility drive 131

ANNEXES Index of GRI indicators 137 External Auditors’ Report on the Sustainability Report 145 6 SUSTAINABILITY REPORT 2013 SUSTAINABILITY REPORT 2013 7

INTRODUCTION 8 SUSTAINABILITY REPORT 2013 HIGHLIGHTS

More than 100 11 COUNTRIES SERVED LANGUAGES 7 6 LOCAL OFFICES IN ITALY, USA, JAPAN, FRANCE, LOCAL CURRENCIES MANAGED AT 31 DECEMBER 2013, SPAIN, CHINA AND HONG KONG 1O CURRENCIES IN 2014

1.1 million 7 ACTIVE CUSTOMERS IN 2013 CUSTOMER CARE CENTRES

2.8 million 713 ORDERS IN 2013 EMPLOYEES (+20% COMPARED WITH 2012; +52% OVER THE LAST 3 YEARS)

1 order every 11 seconds ORDER FREQUENCY 226 EMPLOYEES HIRED IN 2013 99.4% 32 OF DELIVERIES ON TIME EMPLOYEES’ AVERAGE AGE SUSTAINABILITY REPORT 2013 9

87% 860 t OF EMPLOYEES ON A PERMANENT CONTRACT OF PAPER AND CARDBOARD CONSUMED IN 2013 56% 2,069 t OF EMPLOYEES ARE FEMALE OF CO2 EMISSIONS FROM CONSUMPTION OF ELECTRICITY AND NATURAL GAS IN 2013 38% 4.5 million KWh OF EXECUTIVES AND MIDDLE MANAGERS ARE FEMALE OF ELECTRICITY CONSUMED IN 2013 15,469 49% HOURS OF TRAINING IN 2013 ENERGY CONSUMPTION FROM RENEWABLE SOURCES 16,117 100% APPLICATIONS RECEIVED IN 2013 COMPANY CARS ARE HYBRID VEHICLES 10 SUSTAINABILITY REPORT 2013 SUSTAINABILITY REPORT 2013 11 CHAIRMAN’S LETTER TO THE STAKEHOLDERS

Dear Stakeholders, home-working, which are particularly designed to meet the needs of the increasing number of mothers employed at this growing company. 2013 was a record-breaking year for YOOX, with the Group not Significant performances were achieved in the area ofenvironmental only enjoying significant financial results, but also achieving its sustainability: not only did YOOX obtain ISO 14001 environmental Sustainability goals, as shown by the achievement of application certification, it was also included in the most authoritative climate level A+ for this third Sustainability Report, the maximum possible change report, the Carbon Disclosure Leadership Index Italy under the guidelines of the Global Reporting Initiative. 100. YOOX was ranked among the top three leading businesses in Italy and was the only e-commerce fashion company to feature in the The heartbeat of YOOX is made up of the people who work for it, index. Increasingly careful day-to-day management of resources was their hearts, talents and minds drive the Group: a team of over 700 introduced, including the choice of renewable energy for almost young people with an average age of 32, comprising 34 different 50% of total consumption and a fleet of company vehicles entirely nationalities and 56% women, all working passionately to comprising hybrid cars. achieve excellent results each and every day. We believe long-term investment in our Employees is important, which is why YOOX has On Earth Day 2014, YOOXYGEN - the environmental sustainability given permanent contracts to 87% of the workforce. YOOX is programme - will celebrate its fifth birthday. Five intense years of special constantly looking to nurture young talent: 16,117 job applications partnerships with international organisations, designers and celebrities were received worldwide in 2013 alone, from which 226 new staff to raise awareness of environmental issues among the millions of were chosen to join the YOOX team, 50% of whom were under 30. users that browse the YOOX site each month. The 2013 protagonist of Furthermore, 2014 saw the unveiling of the YOOX Stage Programme, YOOXYGEN was top model Amber Valletta, who launched the Master the Group’s first structured on-the-job training programme for new & Muse project in the yoox.com “Eco-mmerce” section: today this online graduates. space offers over 100 sustainable brands from all over the world.

Employee development has always been and remains a priority for YOOX would like this Sustainability Report to be a further invitation YOOX: in 2013, the numerous initiatives included some 15,469 hours to all to continue striving day in, day out, through initiatives large and of training and the introduction of smart working practices, such as small, to help build a more sustainable future for everybody.

Chairman of the Board of Directors Federico Marchetti 12 SUSTAINABILITY REPORT 2013 GUIDE TO THE REPORT

By publishing this latest edition of the Sustainability Report Initiative (GRI) in 2006 (G3), which currently represent the leading (hereafter also referred to as “the Report”), the YOOX Group international standard for sustainability reporting. (hereafter also referred to as “the Company”, “the Group” or The principles set out by the GRI were used as a reference when “YOOX”) is pursuing its commitment to reporting on its social, drawing up the document, defining its content and determining the environmental and economic performance. materiality of various issues, with the involvement of the heads of The document provides a description of the values and rules of the various corporate departments. conduct that guide the Group’s strategy, with a view to initiating The importance of the information included in the Report was and encouraging an open, transparent dialogue with all defined in view of the Group’s economic, social and environmental its Stakeholders. impacts and responsibilities, the applicable regulatory framework and the specific features of the sector in which it operates, as well The YOOX Group Sustainability Report, which is published as the requirements and expectations of its Stakeholders. The annually, has achieved a rating of A+ in its application of the Group is committed to broadening its discussions and involvement Sustainability Reporting Guidelines issued by the Global Reporting with Stakeholders concerning sustainability issues.

REPORT APPLICATION LEVEL C C+ B B+ A A+

OUTPUT REPORT ON: REPORT ON ALL CRITERIA LISTED SAME AS REQUIREMENT FOR 1.1 FOR LEVEL C PLUS: LEVEL B 2.1 - 2.10 1.2 G3 PROFILE DISCLOSURES 3.1 - 3.8, 3.10 - 3.12 3.9 - 3.13, 4.1 - 4.4, 4.14 - 4.15 4.5 - 4.13, 4.16 - 4.17

G3 DISCLOSURES ON MANAGEMENT APPROACH MANAGEMENT APPROACH MANAGEMENT NOT REQUIRED DISCLOSURES FOR EACH DISCLOSED FOR EACH APPROACH INDICATOR CATEGORY INDICATOR CATEGORY

REPORT FULLY ON A REPORT FULLY ON A MINIMUM OF RESPOND ON EACH CORE AND Report Externally Assured Report Externally Assured Report Externally Assured

STANDARD DISCLOSURES STANDARD MINIMUM OF ANY 10 ANY 20 PERFORMANCE INDICATORS, SECTOR SUPPLEMENT* INDICATOR G3 PERFORMANCE PERFORMANCE INDICATORS, AT LEAST ONE FROM EACH OF: WITH DUE REGARD TO THE INDICATORS & SECTOR INCLUDING AT LEAST ONE ECONOMIC, ENVIRONMENT, HUMAN MATERIALITY PRINCIPLE BY SUPPLEMENT FROM EACH OF: SOCIAL, RIGHTS, LABOUR SOCIETY, PRODUCT EITHER: A) REPORTING ON THE PERFORMANCE INDICATORS ECONOMIC, AND RESPONSABILITY. INDICATOR OR B) EXPLAINING THE ENVIRONMENT. REASON FOR ITS OMISSION.

* Sector supplement in final version SUSTAINABILITY REPORT 2013 13

The data and information included in the Report refer to the financial year ended 31 December 2013 and to certain significant MARKET projects launched in the first few months of 2014. Unless This section lists the main performance data and otherwise indicated, the scope of the Report corresponds to that of the most significant information concerning: the Report on Operations and Consolidated Financial Statements for 2013, from which the economic and financial data and • Customers and services provided information included in the Report are taken. • Management of relations with Brand-Partners • Procurement policies and relations with Suppliers In order to ensure that the information given is as reliable as • Shareholder protection and transparency with regard to the possible, priority has been given to directly measurable quantities. financial Community Where estimates are necessary, they are based on the best available methods of calculation, and they are indicated in the document. Where available, the trends of the two previous years PEOPLE have also been included to make it easier to compare data over time. Lastly, it should be pointed out that there have been no This section presents the policies adopted by YOOX significant events or changes in measurement methods that might in managing its People, with a special focus on hiring processes, have a significant impact on the comparability of the information internal career progression and well-being initiatives. It also contained in this document with that provided in the 2012 edition. provides the main quantitative data concerning the composition of the workforce. This 2013 Sustainability Report has been presented to the Board of Directors and to the Shareholders’ Meeting following an audit by the External Auditors, KPMG S.p.A., whose report is attached hereto. COMMUNITY structure and content We invest in Local Communities by supporting social initiatives of the Sustainability Report involving education and the promotion of sustainable fashion. This section of the report describes the projects we have The Sustainability Report is an important tool for communicating launched and the results they have yielded. with Stakeholders and reporting on YOOX’s commitment and results in pursuing its sustainable approach to business. Aside from the introductory section, which aims to present PLANET YOOX’s business approach and the main features of its governance system, the main body of the document is broken This section of the report describes YOOX’s approach to managing down into four different sections (Market, People, Community the direct and indirect environmental impacts of its operations. and Planet), in line with the four key topics identified in the It provides data on the Group’s energy consumption and emissions. “YOOX Sustainability Policy”. 14 SUSTAINABILITY REPORT 2013

SUSTAINABILITY HAS ALWAYS BEEN A KEY PART OF YOOX GROUP’S VALUES AND PRINCIPLES

SUSTAINABILITY MANAGEMENT TOOLS

YOOX has adopted a structured approach to sustainability management, identifying specific tools that can be used to identify the most significant aspects and issues for the Company to focus on and to report transparently on its performance.

MATERIALITY ANALYSIS

SUSTAINABILITY MANAGEMENT TOOLS: SUSTAINABILITY A STRUCTURED APPROACH SUSTAINABILITY REPORT AIMED AT ONGOING POLICY IMPROVEMENT

TARGETS OF IMPROVEMENT SUSTAINABILITY REPORT 2013 15 YOOX GROUP SUSTAINABILITY POLICY

Sustainability has always been part of the YOOX Group’s values The Company is also committed to building lasting relationships and principles. Constant commitment to economic, social and with its Brand-Partners and Suppliers, and to engaging in open environmental sustainability, and therefore listening closely to dialogue with Shareholders and Investors. and ensuring transparent relations with all YOOX Stakeholders YOOX is continuing to focus ever more attention on promoting and (Customers, Employees, Partners, Suppliers, Environment and raising awareness about Sustainable Fashion among Customers Local Communities), is an integral part of YOOX’s DNA, since and operators in the sector. YOOX believes that value creation depends on the ability to One of YOOX’s most distinctive characteristics is its fondness for combine economic objectives with sustainable development. Innovation to support excellent service, and so creating long-term value for stakeholders is a priority. The Group operates in the e-commerce sector, which is currently For YOOX, adopting a sustainable approach to managing its enjoying high levels of sustainable growth thanks to energy saving business activities means knowing how to combine: efforts and the reduction of emissions from the transportation of goods and people. • economic sustainability, by making decisions intended to YOOX plays a proactive role in this context, committed not only ensure business continuity in the long term, thanks partly to the to tackling challenges and seizing opportunities in a responsible application of an effective governance model; manner, but also to championing the dissemination of a culture of environmentally friendly business. • social sustainability, by maintaining an exemplary code of conduct in the management of its business and meeting the This commitment manifests itself in the study and development legitimate expectations of its various Stakeholders, whilst of Customer-focused initiatives designed to provide impeccable respecting certain shared values; service and an innovative shopping experience. YOOX builds its success on valuing its People and creating a • environmental sustainability, by minimising the direct and hospitable, transparent and collaborative working environment. indirect impacts of its activities, with a view to preserving the YOOX constantly monitors the direct and indirect environmental Environment for the benefit of future generations and complying impacts of its activities and helps to foster a culture of awareness with the applicable regulations in force. with regard to climate change. 16 SUSTAINABILITY REPORT 2013

The four dimensions of YOOX’s sustainability

MARKET COMMUNITY Guaranteeing an innovative shopping experience for Customers Facilitating the establishment of good relations with the local area and an excellent service for Brand-Partners whilst aiming to build and promoting sustainable fashion, through: good relations with all Stakeholders, through: • constructive dialogue with young people, by cultivating relations • listening to Customers and investing in innovation aimed at with Universities and other education and training Institutions; improving the entire shopping process and experience, thereby • supporting projects and initiatives that are important to the achieving high levels of Customer satisfaction; Community; • the authenticity, quality and safety of the products sold, thanks • creating partnerships and projects aimed at promoting to product and supply chain monitoring; sustainable fashion; • the development of good, transparent relationships with • seeking out and supporting emerging brands and designers. Suppliers and Brand-Partners; • the adoption of a transparent governance system and constant dialogue with the Financial Community that create value for planet Shareholders. Reducing the direct and indirect environmental impacts of its activities and promoting environmental preservation, through: PEOPLE • making economical use of resources and increasing the Promoting the professional development of its People within a efficiency of its energy consumption with regard to the stimulating, success-orientated working environment, through: management of its offices, IT systems and staff mobility; • investment in training and the provision of programmes • using renewable energy sources; designed to develop skills; • taking decisions designed to maximise sustainability within • a collaborative working environment with a focus on listening to its corporate activities, particularly with regard to choice of staff and their work-life balance needs; packaging materials and sharing best practices with shipping • a transparent selection process designed to attract the best Partners; talent and expertise; • raising awareness about environmentally friendly conduct • a meritocratic environment in which every Employee is treated among Employees and Customers through YOOXYGEN, the fairly and transparently. company environmental sustainability programme. SUSTAINABILITY REPORT 2013 17 TARGETS FOR IMPROVEMENT

The table below gives a brief description of the activities undertaken and each target for improvement set out in the previous edition of the Sustainability Report, as well as the status of each target in terms of the extent to which it has been achieved.

KEY

Target totally achieved Target partially achieved Target not achieved

YOOx made a commitment to… Status 2013 OUTCOME Market Customers Update the Customer Satisfaction model and introduce new key performance Automated KPIs were introduced indicators (KPIs) ---> 2013-2014 in September 2013 Investor Relations Organise Analyst and Investor Days at the Headquarters in Zola Predosa and at Three Capital Market Days were organised in 2013, with presentations the Interporto (Bologna) logistics centre ---> 2013 by Top Management at the Zola Predosa Headquarters and visits to the Interporto logistics centre Add new financial centres based on Investor Targeting activities ---> 2013 In September 2013, Chicago was inaugurated as a new roadshow destination Expand Analyst coverage of YOOX shares ---> 2013 Exane BNP Paribas, Banca IMI and DSF Markets all initiated their coverage of YOOX in 2013 Brand-Partners Share customer analyses on an annual basis and plan CRM activities ---> 2013 The process of sharing sustainability initiatives with Brand-Partners was consolidated People Improve knowledge management and corporate-climate A knowledge sharing platform was designed and a knowledge evaluation processes ---> 2013-2014 mapping project involving 400 Employees was completed, with a focus on cross-team processes. The management survey was completed Develop flexible working models (e.g. home-working) for Employees, particularly Pilot home-working contracts were launched in 2013, in which more with regard to working mothers with dependent children ---> 2013-2014 than 20% of applications were accepted, and new home-working agreements were signed as of January 2014 18 SUSTAINABILITY REPORT 2013

Planet Environment and safety Obtain ISO 14001 certification for the Environmental Management System ---> 2013 ISO 14001 Environmental Certification was achieved Increase the use of electricity generated from renewable sources ---> 2013 The use of energy from renewable sources rose from 20% in 2012 to 49% in 2013 Launch specific projects to monitor paper consumption ---> 2013 The office paper procurement policy was streamlined so that the Group now uses a single Supplier. Awareness-raising measures among Employees concerning the efficient use of company resources helped to reduce paper consumption from 13.9 kg/year per Employee in 2012 to 11 in 2013 Review the Environment and Safety Policy ---> 2013 The Environment and Safety Policy was reviewed and supplemented in September 2013 SUSTAINABILITY stakeholder engagement Launch Stakeholder dialogue initiatives in order to identify their expectations for The Company is engaging in dialogue with Stakeholders. With regard to the purpose of designing and developing measures for improvement Customers, the “Voice of the Customer” initiative is under way, aiming to gather and analyse customer feedback on the service YOOX provides and the quality of products, as well as any suggestions they may have In line with the commitments set out in its Sustainability Policy, YOOX has identified a series of targets designed to help it put its commitment to socio-environmental issues into practice in its future operations. Future commitments Market Customers Total compliance by the three multi-brand online stores (yoox.com, shoescribe.com and thecorner.com) with the international Fur Free Retailer Program promoted by the Fur Free Alliance (FFA), in coordination with the Italian Anti-Vivisection League (LAV) ---> 2014 Extend the Customer Care service to operate 24/7 using native speaker operators ---> 2014 Increase the number of currencies accepted for payment from 6 to 10 ---> 2014 Launch new eco-fashion projects and gradually expand the YOOXYGEN selection ---> 2014 Enhance the shopping experience offered to Customers by consolidating cross channel services between online and offline stores ---> 2014 Investor Relations Organise the first roadshow in Asia to promote YOOX’s equity story to Asian Investors ---> 2014 Further raise the YOOX Group’s profile, history and strategies on a global level and especially in English-speaking countries ---> 2014-2015 SUSTAINABILITY REPORT 2013 19

brand-Partners Expand activities aimed at engaging Brand-Partners in sustainability issues by collecting and sharing information about sustainability activities managed ---> 2014

People Within all company departments, define and implement YOOX Career Paths specific to the various managerial and other positions within the Company ---> 2014 Enhance the ENJOYOOX programme by developing a structured system of benefits for Employees (food and beverage, public transport, well-being and leisure time, banking and insurance, etc.) ---> 2014

Implement new home-working contracts and other initiatives to support working mothers ---> 2014-2015

Community Pursue partnerships with Brands or designers to finance charity and social initiatives ---> 2014

Continue to donate old computers to schools or not-for-profit organisations ---> 2014

Strengthen training initiatives in collaboration with Universities and other training and Post-Graduate Education Institutions ---> 2014-2015

Planet Environment and safety Continue to make buildings more energy efficient (lighting, boilers, roof insulation, new photovoltaic facilities, etc.) ---> 2014

Increase the proportion of electricity consumed from renewable sources ---> 2014

Expand the company shuttle service and promote Car Pooling and Bike Sharing as ways to commute ---> 2014 Extend the Safety and Environment certification to the overseas offices ---> 2015

Introduce a BMS (Building Management System) to measure, monitor and improve the energy efficiency of company buildings ---> 2015 Define a commuting plan for staff ---> 2015 Standardise all certifications for packaging used for deliveries to meet the FSC standard ---> 2015 Obtain ISO 50001 certification for the Energy Management System ---> 2015 Improve the efficiency of IT systems (expand virtualisation and adopt blade technology for the data centres) ---> 2015-2016

Sustainability Add a dedicated sustainability section to the corporate Intranet for sharing significant projects and initiatives ---> 2014 Join “Agenda 21” and the “Global Compact Network” ---> 2014 Include socio-environmental criteria and parameters in the MBO incentive scheme ---> 2014-2015 20 SUSTAINABILITY REPORT 2013 1. identity 21

1. Identity 22 SUSTAINABILITY REPORT 2013 Identity

1.1 YOOX GROUP’S profile and activities

YOOX Group is the global Internet retail partner for leading fashion & design brands. Established in June 2000, it has become a market leader with the multi-brand online stores yoox.com, thecorner.com and shoescribe.com as well as 37 mono-brand online stores “Powered by YOOX Group”, achieving international growth in the years since its creation. The Group is a partner of Kering, with which it has set up a joint venture dedicated to managing several mono-brand online stores and numerous luxury brands of the Group.The Group has always prioritised global Customer service of the very highest quality, marked by rapid delivery, fast and easy returns, secure payments, a total privacy guarantee, and Customer service via phone and e-mail. It is always seeking cutting-edge technological solutions to guarantee its Customers a unique and innovative shopping experience.

YOOX was listed on the STAR segment of the Milan stock exchange in 2009 and admitted to the FTSE MIB index in December 2013, proof of its strong growth. yoox.com, established in 2000, is the world’s leading lifestyle e-store for multi-brand fashion, design and art. Thanks to long- standing direct relationships with designers, manufacturers and official retailers worldwide, yoox.com offers a never-ending selection of products, including a wide range of hard-to-find clothing and accessories from the world’s most prestigious designers, exclusive capsule collections, eco-friendly fashion, a unique assortment of home design objects, rare vintage finds, books, and a curated selection of compelling and collectable artworks chosen by international curators and critics from the world's leading galleries and institutions. 1. identity 23

3 37 MULTI-BRAND ONLINE STORES MONO-BRAND ONLINE STORES

Launched in 2008, thecorner.com is the luxury online boutique devoted to creating distinctive style and showcasing an eclectic and selective assortment of high fashion and directional designers for men and women from around the globe through dedicated mini-stores. shoescribe.com, launched in 2012, is the online destination for women dedicated entirely to high-end shoes and everything that surrounds them: a wide-ranging and carefully edited assortment including everything from top designer names to researched brands, conveyed through a blend of e-commerce, editorial content and exclusive services.

Since 2006, YOOX designs and manages mono-brand online stores for fashion brands looking to offer their latest collection on the Internet. Thanks to years of experience and online shopping expertise, YOOX Group offers its Brand-Partners a complete solution including the ideation and implementation of the creative concept, innovative interface design, a customised technological platform, global logistics, excellent Customer Care and international web marketing. 24 sustainability report 2013

As at 31 December 2013 there were 30 active mono-brand online stores: marni.com, emporioarmani.com, diesel.com, stoneisland.com, valentino.com, emiliopucci.com, moschino.com, bally.com, dsquared2.com, jilsander.com, robertocavalli.com, coccinelle.com, giuseppezanottidesign.com, napapijri.com, albertaferretti.com, maisonmartinmargiela.com, zegna.com, y-3store.com, brunellocucinelli.com, bikkembergs.com, dolcegabbana.com, moncler.com, armani.com, trussardi.com, barbarabui.com, pringlescotland.com, pomellato.com, alexanderwang.com, missoni.com and dodo.it.

The YOOX Group is a partner of Kering, with which it has set up a joint venture dedicated to managing the mono-brand online stores for the many luxury brands of the Group. As at 31 December 2013, these included the following active online stores: Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Sergio Rossi, Stella McCartney and Brioni.

Though it is a global company, the key to YOOX’s Customer service is the strong local approach it has developed, aiming to guarantee a totally localised experience and excellent service in the various countries where it has a presence. The Group is active in more than 100 countries, with 5 logistics centres located strategically on three continents – in Italy (where the central unit is the Bologna logistics centre), the United States, Japan, China and Hong Kong – and 7 Customer Care centres in different parts of the world. 1. identity 25

YOOX Group provides its “Powered by YOOX Group” online stores with site content in 11 languages, local payment systems, 6 currencies, size conversion, Customer Care in multiple languages and an ad hoc service for specific markets.

“YOOX” IN THE Treccani ENCYCLOPEDIA Its very name reveals the nature of YOOX, a human touch that fuses with technology: X and Y, the male and female chromosomes, embrace the zero of the binary code, the fundamental language of the information age. Since 2000, YOOX has been cited in over 45,000 articles published by leading newspapers and books worldwide. “YOOX” has been recognised as part of the lexicon of the third millennium, being included in the “Lexicon of the 21st century” section of Italy's Treccani encyclopaedia (2014 edition). 26 SUSTAINABILITY REPORT 2013

GLOBAL PRESENCE AND EXPERTISE

Over 100 Countries served, with 99.4% of deliveries on time1

1 HEADQUARTERS IN ITALY 1 Order processed every 11 seconds

5 Strategically located logistics centres, guaranteeing best-in-class service to all major fashion markets: Italy, USA, Japan, China, Hong Kong

7 Local Offices Italy, USA, Japan, France, Spain, China, Hong Kong

4 Digital Production Facilities Italy, USA, Japan, China

7 Customer Care Centres covering all time zones

11 Operational Languages

6 Currencies in 2013, 10 Currencies by 2014

Local Payments

Dedicated couriers in selected markets to fulfill specific local needs

Next-day and Saturday delivery selectively available in different markets

Butler service and authenticity RFid seal for China

12 Delivery by appointment in Japan 9 3

6,750 drop-off points in Europe for delivery & returns by 2014 1. identity 27

GLOBAL PRESENCE AND EXPERTISE

Over 100 Countries served, with 99.4% of deliveries on time1

1 HEADQUARTERS IN ITALY 1 Order processed every 11 seconds

5 Strategically located logistics centres, guaranteeing best-in-class service to all major fashion markets: Italy, USA, Japan, China, Hong Kong

7 Local Offices Italy, USA, Japan, France, Spain, China, Hong Kong

4 Digital Production Facilities Italy, USA, Japan, China

7 Customer Care Centres covering all time zones

11 Operational Languages

6 Currencies in 2013, 10 Currencies by 2014

Local Payments

Dedicated couriers in selected markets to fulfill specific local needs

Next-day and Saturday delivery selectively available in different markets

Butler service and authenticity RFid seal for China

12 Delivery by appointment in Japan 9 3

6,750 drop-off points in Europe for delivery & returns by 2014

1Data relates to the annual results as at 31 December 2013. Data processed based on information from logistics Partners. 28 SUSTAINABILITY REPORT 2013 2012 YOOX Group launches shoescribe.com, the online destination THE MAIN STAGES OF YOOX dedicated entirely to shoes

YOOX Group and Kering 2010 partner to create a YOOX Group enters joint-venture dedicated to China as a first mover managing the mono-brand in fashion e-commerce online stores for several brands of the French YOOX Group launches luxury goods group iPad app for yoox.com, on the same day as the The multi-brand online device’s official launch store yoox.com debuts in USA in China with its 2000 Chinese version yoox.cn Launch of the 2004 2008 Automation project multi-brand online Foundation of Launch of the of the global The multi-brand online store yoox.com, YOOX Japan KK for multi-brand online techno-logistics platform store yoox.com launches active in Europe the Japanese market store thecorner.com in Interporto (Bologna) “Art at yoox.com”

2003 2006 2009 2011 2013 Foundation Launch of the first YOOX Group extends YOOX Group introduces YOOX exceeds of YOOX Corporation mono-brand online its outreach several mono-brand € 1 billion Euro for the US market store Powered by to 67 countries online stores market cap YOOX Group: such as marni.cn and marni.com YOOX Group launches dolcegabbana.com.cn yoox.com presents its first iPhone app in China its first television YOOX Group begins for yoox.com commercial developing The luxury online m-commerce YOOX Group presents boutique thecorner.com YOOX Group YOOXYGEN, its opens its doors in China introduces its sixth eco-sustainability with the Chinese currency: the Ruble initiative version thecorner.com.cn YOOX is awarded the On 3 December 2009, UNI EN ISO 14001:2004 YOOX S.p.A. was listed Environmental on the STAR segment Certification of the Italian Stock Exchange as YOOX.MI YOOX enters FTSE MIB 1. identity 29 2012 YOOX Group launches shoescribe.com, the online destination dedicated entirely to shoes

The Code of Ethics was drawn up to ensure that the ethical 1.2 Mission, VALUES values are clearly defined and represent the cornerstone of the AND PRINCIPLES corporate culture, as well as the standard for the behaviour of all Group Employees when conducting business and, more generally, YOOX Group always strives for improvement, relying on its performing their duties. The Company has identified the following passion and creativity to help create value for its end Customers professional ethical virtues: impartiality and equal opportunities; and Partners. The creation and strengthening of relationships with legality and honesty; professionalism and trust; preventing the various Stakeholders based on trust and transparency is one potential conflicts of interest; probity and transparency. of the key elements of the YOOX business model. The Group has internal regulations that govern the specific Company activities are carried out in accordance with fundamental corporate conduct of all its Employees in line with its core values and indispensable values shared across all areas and all levels. of honesty, ethical conduct and transparency. The Company is committed to continually spreading its corporate YOOX’s system of values guides business operations and is the values among its Employees, paying particular attention to staff basis for future growth strategies. training. Understanding and complying with these values involves ethical conduct – in both internal and external relations – and helps to support the Group in terms of economic growth and credibility. 1. identity 31

YOOX VALUES

SPIRIT LISTENING TO THE CLIENT

The spirit of YOOX Group is the people who work here. At YOOX Group we draw our strength from the ability to Their passion, their talents and their minds are the engine behind listen to our clients and put ourselves in their shoes. YOOX Group, which transforms individual efforts into team value. etHICS interNATIONALITY

YOOX Group’s success is based on honesty, transparency, YOOX Group’s international expansion requires understanding integrity and privacy in dealing with clients and in interpersonal and respecting the differences between countries by building relations and on the ability to translate shared ethics into connections and integrating with local culture. credibility and results.

innovaTION ITALIAN DNA

YOOX Group is different with its distinct identity based YOOX Group was born in Italy, from which it gets its aesthetic on quality, creativity and innovation. calling, world-renowned fashion and design products, and the ability to combine flexibility with complexity.

EXCELLENT PERFORMANCE FERTILE GROWTH

YOOX Group strives for excellence in delivering fast, quality YOOX Group’s growth is fuelled by constantly improving how results. In order to do so we believe in a work environment resources are used and optimizing energy in a way that respects that recognises and strengthens the performance and the environment, because YOOX Group firmly believes that the potential of our employees. energy for ideas of the future is green. 32 SUSTAINABILITY REPORT 2013

ACCORDING TO THE FORRESTER RESEARCH, THE FASHION INDUSTRY IN WHICH YOOX OPERATES REPRESENTS 25% OF THE ONLINE RETAIL MARKET IN WESTERN EUROPE AND 21% IN THE US, WITH RESPECTIVE GROWTH OF 17% AND 13% COMPARED WITH 2012

a combination of the clothing, accessories and footwear markets) 1.3 Reference market represents 21% of the entire online retail market, having grown by In 2013, the online retail market continued to record sustained around 12% compared with the previous year, with an estimated growth in almost all geographic markets and the main categories CAGR for 2013-2017 of over 9%. of merchandise. This growth was much faster than in the According to estimates published by Forrester Research in October traditional retail market, which enabled the online channel to 2013, the online fashion market in China (defined as a combination further increase its penetration into the overall retail market, of the clothing, accessories and footwear markets) generated demonstrating the growing trend to use the Internet as a sales of around CNY 385 billion (approximately Euro 47 billion) in complementary shopping channel to physical stores. 2013, up by 38% on the previous year, with an estimated CAGR for 2013-2017 of 21%, considerably higher than that of the other Forrester Research estimates that the online retail market, markets mentioned above. excluding the travel, motor vehicle and prescription medicines sectors, recorded sales in 2013 of around Euro 128 billion in There are many reasons for the strong growth forecasts for the 1 western Europe, an increase of 14% compared with 2012 , online retail market throughout the world. These include the around USD 262 billion in the United States, an increase of 13% wider selection of products offered on the Internet, the desire 2 compared with 2012 and Yen 5.699 billion in Japan, an increase for convenience and the growing perception of the web as a safe 3 of 13% compared with the previous year . For 2014, Forrester place to make purchases. In addition, the number of Internet users estimates growth of over 12% for the online retail market in and people making online purchases continues to grow, together Western Europe, 12% in Japan and 11% in the United States. with the higher average annual expenditure per user, confirming the emergence of a new, increasingly digitally native generation. Within the online retail market, the YOOX Group operates in As further proof of the growing importance of the digital sector, the fashion online retail sector (defined as a combination of today's consumers are looking for a shopping experience that the clothing, footwear, jewellery and watches markets), which integrates the physical and virtual channels, with Forrester according to data from Forrester Research represented in 2013 Research4 estimating that the online channel will play a part in approximately 25% of the online retail market in western Europe over 50% of all retail sales made in the United States by 2016. and 21% of that market in the United States, growing by 17% A growing number of fashion, design and luxury-goods companies and 13% respectively compared with 2012. Forrester forecasts a have embraced the Internet, aware that it can play a strategic role compound annual growth rate (CAGR) in this category of around in helping them expand their global product range and visibility 12% in Western Europe and 10% in the United States for the and establish a direct relationship with their Customers. This has 2013-2017 period. The online fashion market in Japan (defined as led to more companies investing in improvements to the shopping

1 Calculations based on Forrester Research data – “Online retail forecast, 2012 to 2017 (Western Europe), Forrester Research Inc., 25 March 2013”. 2 Calculations based on Forrester Research data – “Online retail forecast, 2012 to 2017 (US), Forrester Research Inc., 1 February 2013”. 3 Calculations based on Forrester Research data – “Online retail forecast, 2013 to 2018 (Asia Pacific), Forrester Research Inc., 7 October 2013”. 4 “US Cross Channel Retail Forecast, 2011 to 2016”, Forrester Research Inc., 23 July 2012. 1. identity 33

experience, online content and alternative channels to sustain online sales over the long term, such as social and 1.4 Key sustainability mobile commerce, a channel that is playing an increasingly issues and relations significant role. with Stakeholders

In the Sustainability Report, the YOOX Group describes the most significant initiatives and projects carried out in the key areas of sustainability, classified as such based on a structured analysis of their materiality. This analysis, which was conducted in 2013 with the involvement of the corporate departments responsible for guiding and implementing operations in the area of sustainability, took into account the Group’s strategy, mission and corporate values, and therefore its perception of the importance of individual issues, as well as the Stakeholders’ perception of their significance. The following areas were identified as key elements to be taken into consideration when defining material issues: • the creation/distribution of sustainable value in the long term; • a transparent and effective governance model to support the Business; • a constant focus on regulatory compliance when carrying out operations. This approach was also followed when identifying the key aspects to be mentioned in this Report, with reference to the new version of the GRI-G4 Reporting Guidelines. The results of the materiality analysis are shown below in the form of a matrix, with a particular focus on the issues considered to be “most significant”. 34 SUSTAINABILITY REPORT 2013

MATRIX OF MATERIALLITY Customer satisfaction, innovative shopping Skill development, professional experience and development and training customer service

Climate change and Attracting talent, generating Green IT employment and job stability

Quality of supplies and Transparent and direct relations

VERY IMPORTANT attention to with analysts, investors socio-environmental issues and the media in the supply chain Quality of work environment and corporate welfare Clear and effective Valuing green products and internal communication sustainable fashion (e.g. YOOXYGEN)

Environmental impact Sustainable of product transportation packaging SIGNIFICANCE TO STAKEHOLDERS

Cultural diversity IMPORTANT

IMPORTANT VERY IMPORTANT

SIGNIFICANCE TO YOOX

KEY VERY IMPORTANT Environmental aspect

Social aspect SIGNIFICANCE TO STAKEHOLDERS IMPORTANT

IMPORTANT VERY IMPORTANT SIGNIFICANCE TO YOOX 1. identity 35

Dialogue with Stakeholders is an essential part of YOOX’s opportunities for dialogue and sharing. sustainability strategy. It helps to forge mutually beneficial In this sense, the Sustainability Report is a valid tool for relationships based on transparency, trust and consensus on communicating guidelines defined, performance delivered, decisions taken. projects launched and commitments made for the future. The Company is committed to promoting the consideration of legitimate Stakeholder expectations by creating and developing Below is a list of significantStakeholders identified by YOOX.

CUSTOMERS

EMPLOYEES ENVIRONMENT

SUPPLIERS GOVERNMENT AUTHORITIES PARTNERS

COMMUNITIES ANALYSTS AND MEDIA AND LENDERS

SHAREHOLDERS 36 SUSTAINABILITY REPORT 2013

the principles and criteria recommended by the updated December 1.5 Corporate governance 2011 version of the Italian stock exchange’s Corporate Corporate governance is the combination of tools, rules and Governance Code. mechanisms designed to ensure the best possible corporate The Company has adopted a traditional management and control decision-making process in the interests of the various model (pursuant to Articles 2380-bis et seq. of the Italian Civil Stakeholders. Code) based on the Shareholders’ Meeting, the Board of Directors, When it defined its governance structure, YOOX S.p.A. adopted the Board of Statutory Auditors and the External Auditors.

SHAREHOLDERS’ MEETING

BOARD OF STATUTORY BOARD OF EXTERNAL AUDITORS DIRECTORS AUDITORS

DIRECTOR COMPENSATION CONTROL AND COMMITTEE FOR internal SUPERVISORY APPOINTMENTS COMMITTEE RISK COMMITTEE RELATED-PARTY audit BOARD COMMITTEE TRANSACTIONS 1. identity 37

The Board of Directors Corporate Governance 2013 2012 2011 Total members of the Board of Directors (no.) 7 7 7 The members of YOOX S.p.A.’s Board of Directors are appointed Executive directors on the 1 1 1 by the Shareholders’ Meeting, taking into account the eligibility, Board of Directors (no.) professionalism and good-standing requirements provided for Independent directors on the 4 4 3 by law and by other applicable provisions. Before making the Board of Directors (no.) appointments, the Shareholders’ Meeting must determine the Meetings of the Board of Directors (no.) 6 10 8 number of directors and the term of office of the Board. The number of directors can range from five to 15, and their term of Average attendance of directors 86% 87% 91% at Board meetings (%) office can be no longer than three financial years. There must also Meetings of the Director Appointments - - - be an appropriate number of independent directors as specified by Committee (no.) law and, given that the Company is listed on the STAR segment of Meetings of the 2 6 6 the MTA electronic exchange, in compliance with the Instructions Compensation Committee (no.) for Stock Exchange Regulation. Meetings of the Control and 4 4 4 Unless already decided by the Shareholders’ Meeting, the Board Risk Committee (no.) of Directors elects the Chairman from among its members; it may Meetings of the Committee for Related-Party 1 1 - also elect one or more Vice Chairmen, who will remain in their Transactions (no.) respective post for the duration of their directorship, which expire Meetings of the Board of Statutory Auditors (no.) 7 7 9 on the date of the Shareholders’ Meeting called to approve the financial statements of the last year of their term. The Company also has a Director Appointments Committee, Lead Independent Director Compensation Committee, Control and Risk Committee and Committee for Related-Party Transactions, all consisting of The Lead Independent Director, who is appointed by the Board members of the Board of Directors. of Directors pursuant to the Corporate Governance Code, is The curriculum vitae of every director is filed at the registered responsible for dealing with and coordinating requests from office and is available in the “Corporate Governance” section of the non-executive directors and, in particular, the independent the Company’s website, www.yooxgroup.com. directors. The Lead Independent Director, an independent director with appropriate accounting and financial expertise, is also Chairman of the Director Appointments Committee, a member of the Compensation Committee, Chairman of the Control and Risk Committee and Chairman of the Committee for Related-Party Transactions. 38 SUSTAINABILITY REPORT 2013

Board committees • Committee for Related-Party Transactions: comprising independent directors, as specified by the “Related-Party The following committees have been set up within the Transactions” Procedure, this committee helps the Board to Board of Directors: evaluate and approve such transactions.

• Director Appointments Committee: comprising BOARD OF DIRECTORS three non-executive directors, the majority of whom has Chairman and Chief Executive Officer Federico Marchetti to be independent, the functions of this committee include recommending that the appointment of directors is governed by Vice Chairman Stefano Valerio methods that ensure transparency and a balanced composition Non-executive director Mark Evans of the Board, making sure in particular that there is a sufficient Independent non-executive director Catherine Gérardin-Vautrin number of independent directors. Independent non-executive director Elserino Mario Piol

• Compensation Committee: comprising three non-executive Independent non-executive director Massimo Giaconia directors, the majority of whom has to be independent, this Independent non-executive director Raffaello Napoleone committee has an advisory and recommendatory role, and The current Board of Directors was appointed by the Ordinary Shareholders’ its main duty is to submit proposals to the Board of Directors Meeting of 27 April 2012 and will remain in office until the approval of the separate financial statements for the year ended 31 December 2014 regarding the compensation of the Chief Executive Officer and of directors holding specific positions, as well as, at the suggestion of the Chief Executive Officer, the determination of criteria for BOARD OF STATUTORY AUDITORS the compensation of executives. Chairman Filippo Tonolo Standing auditor David Reali • Control and Risk Committee: comprising three non-executive directors, all of whom must be independent, this committee Standing auditor Patrizia Arienti advises and makes recommendations to the Board of Directors Alternate auditor Edmondo Maria Granata and to the executive director with responsibility for the Internal Alternate auditor Salvatore Tarsia Control and Risk Management System; in particular, it helps The current Board of Statutory Auditors was appointed by the Ordinary to define the guidelines for the Internal Control and Risk Shareholders’ Meeting of 27 April 2012 and will remain in office until the Management System and to periodically assess its suitability, approval of the separate financial statements for the year ended effectiveness and functionality. 31 December 2014 1. identity 39

Internal Control and Risk Management System organisational, management and control model pursuant to legislative decree 231/01 The Internal Control and Risk Management System is the Organisational, Management and Control Model pursuant to combination of rules, procedures and organisational structures Legislative Decree 231/01, aimed at preventing specific offences that allow the Company, through an appropriate process of by employees and/or contractors in the interest or to the identification, measurement, management and monitoring of the advantage of the Company main risks, to be run in a sound and correct manner, in line with established objectives. integrated environment and workplace health and safety management system The structured and formalised models that the Company has put Complies with the British OHSAS 18001:2007 standard and with in place to manage internal controls and corporate risks are as the UNI EN ISO 14001:2004 standard follows: information security management system strategic risk management model Based on the international ISO/IEC 27001 standard and a formal The Model is centred around carrying out a preliminary analysis information risk analysis process for the management of risks of risks and preventive checks in relation to initiatives of strategic relating to the confidentiality, integrity and availability of company importance, as well as assessing the impact of potential negative information (including the management of privacy risks pursuant to events on the Group’s strategic plan and accounts. It fulfils the Legislative Decree 196/2003, as subsequently amended) need to align management’s actions with the Company’s strategic objectives and propensity to risk model pursuant to law 262/05 Model pursuant to Law 262/05, as subsequently amended, concerning the functions of the Director responsible for preparing the financial statements, with regard to the organisation and formalisation of administrative and accounting procedures and procedures adopted for the preparation of financial reports, as well as verification of the adequacy and effective operation of said procedures 40 SUSTAINABILITY REPORT 2013

The various elements that comprise the Company’s control Code of Ethics and Organisational Model environment are described below. The Company departments play pursuant to Legislative Decree 231/2001 a key role in the Internal Control System by performing second- or third-level controls on corporate processes or by supporting and YOOX S.p.A. adopted an Organisational, Management and advising other departments (Planning and Control, Legal, Tax & Control Model to prevent the offences mentioned in Legislative Corporate Affairs, Internal Audit, etc.). Decree 231/2001 (hereinafter also referred to as “Model 231”), as subsequently amended, on 3 September 2009. control environment On 16 December 2010 and again on 31 July 2013, the Board of Directors resolved to update this model in light of amendments to The Code of Ethics, which defines all the values recognised, applicable regulations and case law and of internal organisational accepted and shared across the entire YOOX community during changes. the performance of company business, and outlines appropriate conduct in line with these values The Code of Ethics is an integral part of this model. It outlines the ethical principles and conduct that should be followed by Company The objectives, responsibilities and roles defined and formalised Employees and anyone else who carries out work for the Company. as part of the organisation of the Group The Code of Ethics forms the basis for the Company’s control environment, ensuring that its activities are always grounded in Powers and authorisations consistent with organisational the principles of probity and transparency. The Board of Directors responsibilities resolved to adopt the current version of the Code of Ethics on 16 December 2010. A training model covering the major regulatory topics, the Group itself and the individual business lines Compliance with the Code of Ethics and with Model 231 is monitored by the Group’s Internal Audit department, which has A body of policies and procedures to govern the major corporate been given a mandate by the Board to perform Group-wide checks processes on all relevant areas and corporate processes. 1. identity 41

The Organisational Model structure Compliance audit pursuant to Legislative The model adopted by the Company consists of: Decree 231/01

• a general part that sets out the main reasons for adopting the During the course of the 2013 financial year, five Model model and the key elements it comprises, as well as identifying 231 compliance audits were carried out in relation to the the offences that are significant to the Company; following areas of risk: “Acquisition and management of professional positions”, “Management of public funding and • a special part that contains sections dedicated to each loans”, “Selection and hiring of Employees”, “Management category of offence identified in the general part, giving a more of sponsorships, donations, gifts and entertainment analytical description of how offences can be committed and the expenses” and “Management of Customer refunds”. relevant preventive measures. Further compliance checks were carried out together with YOOX S.p.A.’s Model 231 currently includes all offences included operational and accounting audits performed pursuant to in Legislative Decree 231/01 as at 31 December 2013. Law 262/05. These checks did not reveal any situations that would compromise the adequacy or functioning of Model 231 and the Code of Ethics. The 2014 Audit Schedule, which was approved by the Board of Directors on 5 March 2014, includes the performance of audits and follow-up checks on certain areas at risk of crime pursuant to Legislative Decree 231/01. 42 sustainability report 2013

Supervisory Board Communication and training in relation to Model 231 and the Code of Ethics The YOOX S.p.A. Supervisory Board, which is appointed by resolution of the Board of Directors and comprises three members Employees are made aware of the content of Model 231 and the (two of whom are external), has independent powers of initiative Code of Ethics through communications and training programmes. and control. It is charged with checking the effectiveness of Model New hires are notified in their employment contract and during 231 and compliance with its methods and procedures, and with introductory training programmes. All Employees can consult making recommendations to the Board of Directors on any updates Model 231, the Code of Ethics and company procedures on the and additions to the model. It reports to the Board of Directors Group’s Intranet. Employees are notified of any updates and every six months on the checks it has performed in the period additions to the model by e-mail from the Corporate & Internal in question. Communication department. As a member of the Supervisory Board, the head of the Internal Audit department helps the Board to understand corporate When Model 231 was updated on 31 July 2013, the Company changes and phenomena, and to rapidly implement the also devised a dedicated training course. The first general training recommendations of the Supervisory Body within the Company. module on the model's content, aimed at all Employees, was During 2013, the Supervisory Board attended all meetings completed in early 2014 via online sessions and tests. of the Control and Risk Committee, for their full duration, Additional modules will involve the completion, in the first half and thus participated in and became aware of all topics for of 2014, of specific sessions on the areas of the Company at risk discussion in these meetings potentially pertaining to of crime. Periodic awareness-raising and coordination meetings Legislative Decree 231/01. between management and the Supervisory Board will also The Supervisory Board holds regular meetings with the senior continue, as will the training of directors and statutory auditors. management of the Company and the managers responsible for high-risk processes, in order to ensure agreement on risk profiles and on the evolution of the business and organisational structures. No critical aspects arose during 2013, and there were no indications of any potential violations of Model 231. 1. identity 43

With a view to ensuring that third parties (e.g. Suppliers, Partners, Clients and Consultants) have sufficient awareness of the model and the Code of Ethics, such parties are required to sign specific contractual clauses declaring that they will read and comply with the provisions of the two documents. The clauses provide for the termination of the relationship with the Company in the event of non-compliance.

Model 231 and the Code of Ethics are available in the “Corporate Governance” section of the Company website, www.yooxgroup.com. 44 bilancio di sostenibilità 2013 2. market 45

2. market 46 SUSTAINABILITY REPORT 2013 2013 market A record year for YOOX

Summary of results 2013 2012 2.1 ECONOMIC PERFORMANCE (Euro thousands) 2.1.1 Economic and financial highlights: Consolidated net revenues 455,590 375,924 key aspects EBITDA 43,061 32,085 Operating profit 23,909 18,911 In 2013, the YOOX Group continued its growth in all major Consolidated net income 12,620 10,183 international markets and in both its business lines. The results achieved confirm the effectiveness of the Group’s business model, which involves a perfect balance between different geographical areas and types of product, in terms of both price and Customer Reclassified consolidated 2013 2012 statement of financial position profile. The mobile channel made a hugely significant contribution (Euro thousands) to the year's results, having grown in each quarter to account for Net working capital 28,304 32,061 40% of total traffic at year end. Non-current assets 71,224 55,472 Consolidated net revenues of the YOOX Group, net of returns and Non-current liabilities (excluding financial -363 -340 liabilities) customer discounts, amounted to Euro 455,590 thousand in 2013, an increase of 21.2% on the previous year. Net invested capital 99,165 87,193 The Group’s net invested capital went from Euro 87,193 thousand Shareholders’ equity 119,663 101,62 at 31 December 2012 to Euro 99,165 thousand at 31 December Debt / (net financial position) -20,498 -14,569 2013, an increase of 13.7%. This increase was due to the Group’s Total sources of financing 99,165 87,193 continuing policy of investment in its techno-logistics platform and in technology. Despite the significant investments made, the The Multi-brand business line, which comprises yoox.com, net financial position rose from Euro 14,569 thousand as at 31 thecorner.com and shoescribe.com, generated consolidated net December 2012 to Euro 20,498 thousand as at 31 December 2013. revenues of Euro 328,171 thousand, up by 25.3% compared with the Euro 262,011 thousand recorded in 2012. This performance was attributable to the excellent results achieved by all three online stores. The fourth quarter of 2013 saw net revenues rise by 29.6%, driven by the sharp growth of yoox.com, which achieved its biggest ever increase in sales in terms of absolute value thanks to a considerable rise in its 2. market 47 +20% North America growth in Italy’s net revenues in 2013 YOOX Group’s no 1 market

Customer retention rate, a further increase in its conversion rate Consolidated net revenues 2013 2012 and an extraordinarily successful Christmas campaign. Overall, by geographical area in 2013, the Multi-brand business line accounted for 72% of the (Euro thousands) Group’s consolidated net revenues. Italy 70,852 59,049 Europe (excluding Italy) 218,742 180,180 CONSOLIDATED NET REVENUE BY SECTOR (IN THOUSANDS OF EUROS) North America 102,765 81,514

455,590 MONO-BRAND Japan 34,400 31,081 MULTI-BRAND Other countries 21,803 14,593 375,924 28% Not country related 7,028 9,507 291,188 30% Total 455,590 375,924 27%

North America, the Group’s no. 1 market, generated net revenues 73% 70% 72% of Euro 102,765 thousand (accounting for 22.6% of consolidated net revenues), an increase of 26.1% compared with the previous 2011 2012 2013 year (+30.3% at constant exchange rates). In the fourth quarter, net revenues totalled Euro 29,803 thousand, up by 18.3% The Mono-brand business line includes design, set-up and compared with the same period in the previous year (+23.9% at management of the online stores of some of the leading global constant exchange rates). fashion and luxury brands, as well as the activities of the joint venture with Kering dedicated to the management of the An excellent performance was recorded in the fourth quarter mono-brand online stores of the various Kering luxury brands. in Italy, which experienced a marked accelleration market since 2009. This business line generated consolidated net revenues of Euro Italy's performance strongly benefited from the effective yoox.com 127,419 thousand, an increase of 11.9% compared with the Euro TV's advertising conducted in the quarter to support the Christmas 113,913 thousand achieved in 2012, while retail net revenues campaign. The positive smartphone and tablet contribution to grew by 27.5%. Overall, as at 31 December 2013, the mono-brand sales – 16% higher than in the rest of the world – and customers' business line accounted for 28% of the Group’s consolidated net established trust in the YOOX brand. revenues, with 37 online stores. The acceleration of net revenues in the fourth quarter resulted in total turnover for the year in Italy of Euro 70,852 thousand, up by 20.0% compared with the previous year. 48 bilancio di sostenibilità 2013

The Rest of Europe also posted solid results, with growth of 2.1.2 Creating and distributing value 21.4% in the year, accelerating further in the fourth quarter (+26.8%), with exceptional performances in the UK. The Company seeks to distribute the economic value it generates among its Stakeholders. This value gives an indication of the Japan recorded positive growth at current exchange rates: YOOX Group’s ability to create wealth and distribute it to its +10.7% in the year and +7.4% in the fourth quarter compared various Stakeholders. In accordance with GRI guidelines, the with the same periods of 2012, despite the sharp depreciation statement below distinguishes between three types of economic of the yen; at constant exchange rates, Japan grew by 40.0% value: generated, distributed and retained. over the year, and by 39.6% in the last quarter.

The Group made investments totalling Euro 32,613 thousand in 2013, comprising Euro 18,386 thousand in intangible assets and Euro 14,227 thousand in property, plant and equipment. Increases in intangible assets related mainly to investments in multi-year technological development projects valued at Euro 16,728 thousand. In February 2013, the Group completed the major project of automating its global logistics centre at Interporto (Bologna), which was launched at the end of 2010 with the goal of servicing future growth, while improving operational efficiency and the quality of the service offered to customers. YOOX also continued to invest in new technology in 2013 in order to ensure that YOOX always have a cutting-edge platform able to capitalise on all the opportunities that arise from changes in Customers’ behaviours and preferences.

More information on the main features of YOOX Group activities in 2013 can be found in the Directors’ Report on Operations, which is available on the Group’s website as part of the consolidated financial statements: www.yooxgroup.com/it/investor_relation/ statements_and_reports/annual_reports_2013.asp 2. market 49 +21.2% growth in net revenues in 2013

ECONOMIC VALUE GENERATED AND DISTRIBUTED (Euro thousands) 2013 2012 difference Economic value generated by the Group 472,029 389,176 21.3% Revenues 455,590 375,924 21.2% Other income 19,006 14,747 28.9% Financial income 98 135 -27.4% Value adjustments to financial assets (639) (366) 74.6% Write-down of receivables (62) (50) 24.0% Exchange rate differences (1,963) (1,212) 62.0% Economic value distributed by the Group 439,835 365,501 20.3% Operating costs 390,921 324,655 20.4% Employee compensation 39,957 33,187 20.4% Payments to lenders 1,076 726 48.2% Payments to investors - - - Payments to government authorities* 7,771 6,898 12.7% Gifts to third parties 109 35 211.4% Economic value retained by the Group 32,195 23,676 36.0% Depreciation and amortisation 19,153 13,174 45.4% Provisions 422 318 32.7% Reserves 12,620 10,183 23.9% * payments to government Authorities include deferred taxes 50 SUSTAINABILITY REPORT 2013

“Listening to Customers”, and understanding their demands and expectations, is one of YOOX’s values and strengths and an area in which it has always invested considerable resources and attention

2.2 Customer relations

2.2.1 Managing Customer relations SURPRISE OUR SURPRISE Customer care culture

YOOX’s main focus is its Customers and its ability to offer them the best possible shopping experience. Listening to Customers, YOOX’s commitment to its Customers and understanding their demands and expectations, is one of YOOX’s strengths and an area in which it has always invested In line with its corporate values and overall strategy, YOOX considerable resources and attention. has defined a series of guidelines to underpin its commitment The ability to listen to Customers also plays a key role in the to its Customers: Group’s constant desire to improve and innovate. • foster stable relationships based on trust and mutual respect; YOOX is committed to fostering a “Customer Care culture” within • act with honesty, courtesy and transparency; the Group across all teams involved in managing Customer • provide high-quality products and services; relations. • ensure the highest degree of security in the use of payment systems; The main measures put in place to that end are the definition of • listen to Customers’ needs; a mission and shared corporate values, and the development of • promote corporate social responsibility at all levels of the Group; specific projects. The Surprise“ Our Surprise” mission helps • offer innovative services. YOOX teams and local Customer centres on a daily basis to maintain their focus on Customers and their expectations.

2. market 51

The “Voice of the Customer” programme allows customers’ feedback, opinions and expectations to be regularly collated and analysed

Since 2013, all new hires have been trained in Customer care receive a badge in a different colour, depending on the type of issues through an induction day course entitled “Customer Care & measure they have undertaken. The schemes rewarded in 2013 Voice of the Customer”. The course teaches every Employee who were: Share the Knowledge, Improve the Experience, Spread YOOX's Customers are, what their expectations are, what basic YOOXLOVE, User Experience and Entry Level. processes are in place and, most importantly, how Employees can The Customer Ambassador programme enjoyed a high level of improve the Customers’ shopping experience in their day-to-day participation, with a large number of badges given out. The winners work. YOOX has also created the “Customer Ambassador” were rewarded with a trip to Lisbon (Portugal) and Stamford programme in order to get all Employees involved in continuously (Connecticut, United States) to visit the YOOX Customer Care improving Customer service. Employees who propose or carry out centre to get to know Customers close up by providing telephone projects aimed at improving the Customers' shopping experience assistance in person. The programme will continue in 2014.

Share the knowledge Improve the experience SPREAD YOOXLOVE USER EXPERIENCE entry level

For those who share For those who make a step For those who show they For those who help us For those who show interest information on projects and forward in improving our care about our customers to improve the online in understanding how they activities that may directly processes and tools, with and spread the enthusiasm experience of our customers can improve customers’ or indirectly have an impact new features or bug fixing. to their colleagues through feedback and experience in their own on our customers. every day, proving to be a suggestions. small way. real Customer Ambassador! Just Hired? Listening to the customer has always been a value for YOOX that we share since the first day in the company. For this reason during “Customer Care & Voice of the Customer” day, new hires receive this pin. 52 SUSTAINABILITY REPORT 2013

YOOX Customers: an overview

The Group’s Customer base is two-thirds female and has an 1.1 million ACTIVE CUSTOMERS IN 2013 average age of around 30. These people are active users of the Internet and lovers of fashion, design and art.

The number of active Customers totalled 1,081 thousand as at the end of the year, rising by 14% compared with the 947 thousand 2.8 million ORDERS IN 2013 recorded in 2012. In 2013 the Group had an average of 13.2 million unique visitors per month, compared with 13.0 million in 2012. The number of orders rose from 2,330 thousand in 2012 to 2,785 thousand in 2013, an increase of 20% and equal to one order processed every 13.2 million MONTHLY UNIQUE VISITORS 11 seconds, with the average order value (AOV) rising sharply to Euro 215 (excluding VAT).

During 2013, 99.4% of orders were dispatched within the scheduled delivery times requested by Customers. Thanks 1 order every to automated picking, which improved the order handling management process, peak demand during the Christmas period 11 seconds was managed very efficiently, and the punctuality of deliveries to order fRequency end Customers also reached record levels.

Overview 2013 2012 2011 Number of active Customers (thousands) 1,081 947 808 Number of orders (thousands) 2,785 2,330 2,055 Average order value (Euro) 215 206 180 Number of unique visitors per month (millions) 13.2 13 10.4 2. market 53

Listening to Customers such as individual shopping preferences, so that YOOX can use the responses to better profile our Customer base. The “Voice of the Customer” programme allows Customers’ After launching new projects, YOOX carries out analyses to ensure feedback, opinions and expectations to be regularly collated and that the new feature or service has been welcomed and positively analysed both quantitatively and qualitatively. perceived. YOOX proactively seeks suggestions and ideas from Customers The feedback YOOX receives is aggregated, shared between the through questionnaires and surveys on our websites. The issues relevant corporate departments, and periodically presented to YOOX puts to Customers include specific matters, such as size management. The most important feedback is used to create concrete conversion between countries, as well as more subjective aspects, plans of action aimed at improving the shopping experience.

“Voice of the Customer” a selection of the best #ILOVEYOOX comments from YOOX Customers In 2013 yoox.com launched its first television advertising campaign, featuring “This is my cat….he’s called YOOX” Suzie, Spain “reality commercials” based on spontaneous comments from Customers. Some Customers ended up becoming the stars of the adverts, which “Thanks to yoox.com, even a guy from the Midwest of the United States like authentically document various moments in the daily life of each Customer, me can buy the latest clothes and accessories” Tim, US their shopping experience on yoox.com, their personality, their house and “I love yoox.com. So many different brands all in one place!” their home town, illustrating the real stories behind Customers’ life and Carola, Netherlands style. After the first advert was aired in September 2013, new episodes “Love you. <3” Jonas, Finland were broadcast in December, having been conceived, directed and produced entirely by YOOX. The reality spots were created and produced internally by “I’ve been a satisfied Customer of yoox.com for over five years. I started the YOOX Group’s Video Editing and Art Direction team. yoox.com is keen shopping on the site when I was single, I bought my wedding dress and my to find new stars for its reality spots and get even more present and future husband’s wedding suit from yoox.com, and now I even use it to buy baby Customers involved, and is therefore inviting Customers to apply by sending a clothes for my seven-month-old son!” Evi, Greece video clip to http://www.yoox.com/iloveyooxtv. “Without YOOX, I would be dressed like everyone else here in Washington. You’re one of a kind =)” Eric, US “Our Customers are our reason for being: ever since the day I first had the idea to create YOOX, my first thought was the relationship we would have “I LOVE YOU, YOOX!” Silvia, Italy with our Customers, a relationship based not on the cold, flat screen, but on surprise and emotions. The I LOVE YOOX campaign is the natural evolution “I discovered yoox.com last year and it changed my life (^_-).” Naomi, Japan of this path, on which we have been companions now for 13 years, joined “I want to express once again my complete and unconditional devotion to together in a warm relationship in which we genuinely listen to each other.” YOOX. It’s the only store I buy everything from....you’re brilliant!” Cinzia, Italy Federico Marchetti. 54 SUSTAINABILITY REPORT 2013

Innovation and Customer focus are equally important to YOOX. The Group continued to invest in new technology in 2013 Euro 32.6 million in order to ensure that the Company always have a cutting- value of total investments made in 2013, edge platform able to capitalise on all the opportunities that of which around 60% were in technology arise from changes in customers’ behaviours and preferences

YOOX GROUP GLOBAL TRAFFIC FROM MOBILE 2.2.2 Services designed to provide The Group is currently a leader in mobile commerce, as (DECEMBER 2013) an innovative and exclusive demonstrated by the fact that Internet Retailer’s 2014 edition of the Mobile 500 Guide recently placed YOOX among the top ten shopping experience SHOESCRIBE.COM e-tailers worldwide, and in 23rd position among all retailers. FIRST APP FOR In 2013, the Group concentrated on strengthening its mobile IPHONE & ANDROID In order to offer its Customers an innovative and exclusive offering, which accounted for almost 40% of total traffic at year (DECEMBER 2012) shopping experience and our Brand-Partners impeccable service, end. In December 2013 it launched a new native app for iPad YOOX aims to strike a balance between Customer care and for thecorner.com, which is available in 8 languages. innovation. LAUNCH OF A BRAND The new app was designed to emphasise exclusive images and NEW NATIVE APP The Group has gradually developed a series of services with a high editorial content, and guarantee an excellent user experience. THECORNER.COM technological content, including, in 2013, the launch of the Product (DECEMBER 2013) Exchange scheme, which allows Customers to change the size YOOX.COM & and/or colour of the products they have bought, and the first cross THECORNER.COM CHINESE M-SITES channel services. (OCTOBER & YOOX.COM FIRST DECEMBER 2013) APP FOR IPAD YOOX also continued to invest in new technology in 2013 in order YOOX.COM (APRIL 2010) MOBILE “SPEAK & SHOP TM ” to ensure that YOOX always have a cutting-edge platform able FIRST M-SITE YOOX.COM FIRST (APRIL 2009) APP FOR IPHONE to capitalise on all the opportunities that arise from changes in & IPOD TOUCH Customers’ behaviours and preferences. (NOVEMBER 2009)

Mobile commerce

YOOX has believed and invested in the mobile channel since 2006. Among the pioneers in the industry, YOOX offered Customers the chance to shop using their mobiles when it launched the first '11 '13 '12 '10 yoox.com app for iPhone in 2009, and later unveiled an iPad app on the 0CT '11 OCT '09 JAN '11 OCT '13 OCT '12 DEC '13 JAN '10 JAN '13 JAN '12 JAN '09 MAY MAY '09 MAY MAY MAY day the tablet was officially launched in the United States in 2010. MAY 2006: ANTICIPATING THE MOBILE REVOLUTION VIA THE LAUNCH OF A MOBILE TASKFORCE YOOX.COM FIRST-EVER MOBILE SITE & APP FOR IPHONE AND IPOD TOUCH YOOX.COM FIRST-EVER APP FOR IPAD LAUNCHED WORLDWIDE ON SAME DAY OF THE IPAD DEBUT IN THE US DEVELOPMENT OF M-SITES FOR THE GROUP’S ONLINE STORES & OPTIMISATION FOR TABLET DEVELOPMENT OF CUSTOMISED M-CAMPAIGN 2. market 55

“yoox group taps success 40% via tablets and smartphones” of global traffic is from mobile Financial Times

YOOX GROUP GLOBAL TRAFFIC FROM MOBILE The Group continued to launch several mobile sites for its (DECEMBER 2013) mono-brand online stores, as well as localised versions of yoox.com and thecorner.com in China and the native shoescribe.com app for iOS and Android in German, SHOESCRIBE.COM FIRST APP FOR Japanese, Spanish, Russian and French. IPHONE & ANDROID (DECEMBER 2012)

LAUNCH OF A BRAND NEW NATIVE APP THECORNER.COM (DECEMBER 2013) YOOX.COM & THECORNER.COM CHINESE M-SITES (OCTOBER & YOOX.COM FIRST DECEMBER 2013) APP FOR IPAD YOOX.COM (APRIL 2010) MOBILE “SPEAK & SHOP TM ” FIRST M-SITE YOOX.COM FIRST (APRIL 2009) APP FOR IPHONE & IPOD TOUCH (NOVEMBER 2009) '11 '13 '12 '10 0CT '11 OCT '09 JAN '11 OCT '13 OCT '12 DEC '13 JAN '10 JAN '13 JAN '12 JAN '09 MAY MAY '09 MAY MAY MAY MAY

2006: ANTICIPATING THE MOBILE REVOLUTION VIA THE LAUNCH OF A MOBILE TASKFORCE YOOX.COM FIRST-EVER MOBILE SITE & APP FOR IPHONE AND IPOD TOUCH YOOX.COM FIRST-EVER APP FOR IPAD LAUNCHED WORLDWIDE ON SAME DAY OF THE IPAD DEBUT IN THE US DEVELOPMENT OF M-SITES FOR THE GROUP’S ONLINE STORES & OPTIMISATION FOR TABLET DEVELOPMENT OF CUSTOMISED M-CAMPAIGN 56 SUSTAINABILITY REPORT 2013

The YOOX Group is once again one step ahead of the latest trends thanks to continued investment in its technology platform, offering customers a cross channel experience and combining the real and the virtual

Cross channel

YOOX continued to invest in its technology platform for the release of cross channel functionality in order to allow Group mono-brand Partners to offer their Customers a fully integrated and consistent experience between the offline stores and the online stores “Powered by YOOX Group”. According to research, a new generation of luxury-goods consumers is being born. Increasingly at ease with digital technology, these consumers use various online devices simultaneously, including for shopping. As a result, today’s luxury-goods consumer expects a luxury experience that is fully integrated and consistent across all channels (physical store, mobile and online). Already a pioneer of mobile commerce, the YOOX Group is once again one step ahead of the latest trends and, thanks to continued investment in its technology platform and the launch of cross channel functionality, can allow its mono-brand Brand-Partners to grasp this opportunity and thus offer Customers a cross channel experience, combining the real and the virtual. 2. market 57

CONSISTENT EXPERIENCE LUXURY VALUE FLEXIBLE FULFILLMENT PERSONALISED INTERACTIONS ACROSS CHANNELS ADDED SERVICES AND RETURN OPTIONS ACROSS CHANNELS

Check In-Store Availability Online Click For Fashion Advice Click & Collect or Reserve Database Integration Check online in-store product availability Get phone assistance from a Buy online and pick up in store or Online & offline customer consultant while shopping online reserve online and pay in store information integrated in a single upon pick-up database through unique identifier

Augmented Visual Merchandising Buy On Call Return In Store Cross Channel Gift Card Bring in-store rich digital content Buy over the phone with the support Buy online and return in store Pre-paid gift cards for both online (e.g., detailed product pages, streaming of experienced consultants and offline purchases from the catwalk)

Multi-Channel Delivery Book a Tailoring Appointment Click From Store Integrated Loyalty Programme Multi-Channel Delivery Book online an in-store appointment Browse and buy online Earn reward points Consistent experience across devices with a tailoring specialist from in-store kiosks or iPads for both online and (e.g. smartphones, tablets) enhanced by in-store purchases the use of responsive design technology Click & Exchange Buy online, return and exchange in store

Ship From Store & Same-Day Delivery Buy most precious pieces online and ship them from the nearest store 58 SUSTAINABILITY REPORT 2013

yoox group's multi-channel presence 2. market 59

New online functions Social media

October 2013 saw the new release of thecorner.com, with Increasing brand awareness and Customer satisfaction are the revised graphics designed and created entirely by YOOX, and key elements of YOOX's strategy on social media, an increasingly with a considerably improved user experience. important channel in managing Customer relations. By taking advantage of the specific features of the various social During the year, in its constant pursuit to improve the user media and defining different approaches for each of them, in experience, the Group released new features on yoox.com, 2013 YOOX saw a considerable increase in traffic from the main including the option to browse the catalogue by attributes social-networking platforms. The three multi-brand online stores such as fabrics, shapes, prints, occasions and trends, and the currently have a presence on the major social media, including persistent cart, which follows Customers across all their devices Facebook, Twitter, Pinterest, Google+, Instagram, YouTube, Vine and was also rolled out on thecorner.com and a few mono-brand and Tumblr. The Group has also had a profile on LinkedIn online stores. since 2013. Always keen to tailor its Customer relations to each of its local Product Exchange markets, the Group is also active on Chinese social networks such as Douban and Weibo and on social networks in Russian-speaking Choosing the right size and, in general, a product that you can't countries, such as VK, via yoox.com and shoescribe.com. feel or see up close is one of the main challenges of e-commerce. In order to make the process easier and reassure Customers, YOOX has decided to add, on top of the return option on yoox.com and shoescribe.com, a product exchange option. If a Customer is not satisfied with the size or colour of the product purchased, they can request the same item in a different size or colour simply by filling out an online form. The new product is delivered to the Customer free of charge as soon as the returned item arrives at the warehouse and can be checked. The Product Exchange service was devised with the aim of improving the online shopping experience by valuing the Customer's freedom of choice. The exchange option transforms an initially unsuitable product into one that meets the Customer’s needs, free of charge. 60 SUSTAINABILITY REPORT 2013

Awards 2013

Internet Retailer Retail Award YOOX was named one of the world’s top The YOOX Group was awarded the “Digital 10 mobile e-tailers by the 2014 edition Retailer” prize at the first ever Retail Awards, of Internet Retailer's Mobile 500 Guide. which were organised by GDOWEEK and MARK UP, two retail-industry publications Online Retail Awards owned by the "24 Ore Group", to recognise the yoox.com won an award in the “Fashion work of retail companies operating in Italy. & Clothing” category of the Online Retail Awards 2013, celebrating the web, mobile The Webby Awards and tablet retailers that offer Customers The yoox.com native app for iPhone, the best online shopping experience. iPad and Android was selected as an Official Honoree in the “Shopping” category at the 17th annual Webby Awards, the most distinguished awards recognising online excellence, presented each year by the International Academy of Digital Arts and Sciences.

Exclusive services for shoescribe.com Customers extra benefits such as the chance to receive an exclusive shoe care kit, free delivery for a whole year, free repairs, a dedicated shoescribe.com is the online destination for women dedicated Customer care service and a range of other advantages, including entirely to shoes and everything that surrounds them, conveyed the “Cinderella day”, which offers Customers the chance to buy through a blend of e-commerce, editorial content and exclusive a pair of shoes at half price on their birthday. New functions services. have also been added to improve the shopping experience. One shoescribe.com’s most unique feature is its offering of exclusive of these, the review service, allows Customers to comment on shoe-related services: styling advice from the site’s resident shoe their purchase to promote the sharing of Customer experiences. guru Ms. Suzie Scribe, shoe care tips in the Shoe Valet section, Customers can also use the “Birthday Board” to share with their and printable labels and premium stackable boxes to help organise friends the kind of shoes they would like to receive as a your shoe closet. YOOX has also created a special programme for birthday present. our most loyal Customers: the “Shoescribe Programme” offers 2. market 61

2.2.3 Focus on the Customer WEBAWARD in the shopping process thecorner.com received the prestigious YOOX pays attention to its Customers’ needs throughout the WebAward 2013 for Best Fashion Website in shopping process, offering a high-quality service from the time the “Fashion/Beauty Standard of Excellence” the Customer looks for, chooses and orders a product online category right through until the item is delivered, in environmentally friendly packaging, as well as offering assistance and Customer care services. To help Customers complete their orders, YOOX has decided to localise its services based on the country in which a Customer makes their purchase: • localised content • size conversion • six different currencies currently accepted (this will be extended to 10 in 2014) and local payment systems • Customer Services in different languages • local courier services • ad hoc services for certain specific markets

From joining the company to providing Customer service

INBOUND LOGISTICS CATALOGUE PRODUCTION WAREHOUSING SHIPPING CUSTOMER SERVICE 62 SUSTAINABILITY REPORT 2013

YOOX monitors the customer satisfaction rate to ensure that quality standards remain high

YOOX Customer care and Customer satisfaction Customer care: key figures

YOOX is a dynamic, international company, which means that the needs of its Customers are constantly evolving and increasing. 7 Customer Care centres

YOOX offers real-time shipment and return tracking, as well as a Customer care service dedicated to managing any problems that may arise in relation to shipping and delivery. The Customer Care Assistance in 11 languages service is organised on two levels:

• the first level is outsourced via external contact centres coordinated by YOOX; 90% of calls • the second level is managed directly by YOOX operators and is answered within 20 seconds dedicated to managing and resolving more complex issues (e.g. logistics, payments) and supporting the first level.

Customers can contact YOOX at any time using the 100% of e-mails following methods: answered within 8 working hours • e-mail: filling out an online form that transmits the message directly to the Customer Care service of the store in question; • telephone: contacting the Customer Care service. 95% of problems resolved the first time a Customer contacts YOOX 2. market 63

In order to guarantee high standards of quality, YOOX pays special attention to training the operators employed at its 7 Customer KPIs for 2013 Care centres, organising specific training courses and annual training sessions.

Favouring a proactive approach, YOOX is committed to always keeping its Customers informed about the status of its services, promptly communicating any delays or problems with order handling and seeking to resolve the issue as quickly as possible. For deliveries at Christmas, a time of year when order volumes are at their highest, Customers are clearly informed, before finalising The Group pays attention to quality by monitoring key their order, whether a pre-Christmas delivery can be guaranteed. performance indicators. In the first nine months of 2013, 739 thousand e-mail and New KPIs were introduced in 2013 to aid the Group’s focus telephone contacts were received. YOOX is committed to on Customer satisfaction and quality. responding to Customer e-mails within one working day and to telephone calls in just 20 seconds. Customer satisfaction rate The Customer satisfaction KPI monitors Customers’ happiness The main reasons why Customers contact YOOX concern: and the Customer care centres’ commitment to the team • returns and refunds; mission. • delivery status and amendment of order details; • product assistance: colours, wearability, size, fit. Quality rate The quality KPI monitors whether the Customer care centres are acting in line with the team values.

Customer communication and marketing

The YOOX Group’s marketing activities in 2013 focused on three main aspects: acquiring new Customers, increasing the Customer retention rate through Customer relationship management (CRM) and direct marketing operations, and increasing brand awareness. 64 SUSTAINABILITY REPORT 2013 358 million newsletters in 11 different languages

In 2013, the Group designed and promoted web campaigns that for a process of continual improvement that guarantees efficacy allowed the three multi-brand business lines to reach about 40 standards in line with the challenges and problems faced by modern thousand sites in more than 50 countries. During the course of the information systems. year, yoox.com sent more than 358 million newsletters translated into 11 languages. YOOX has developed an internal anti-fraud platform that is YOOX also offers support and advice to its Brand-Partners integrated with the services offered by external providers. The concerning search engine marketing (SEM), affiliation marketing, system automatically monitors all incoming orders, comparing them display advertising and general communication activities. with the information available in order to verify the authenticity of each transaction. Transaction security and data protection If the automated system detects incongruous data or suspects anomalies in an order, an additional manual check is carried out YOOX is committed to using state-of-the-art security systems and by the dedicated Fraud & Loss Prevention team. To ensure that all standards to guarantee the security of transactions carried out on purchases made on the online stores it manages are secure, YOOX its sites and to protect its Customers’ data. The Company complies uses cutting-edge anti-fraud applications such as AVS checks, fully with the personal data protection regulations in force and uses CVV checks, IP geolocation and device fingerprinting, and also has cutting-edge technology and coding systems for purchases made via an internal database of historical transactions. its online stores. In order to protect the confidentiality, integrity and availability of The logistics model and order and return information on its Customers, Employees and Brand-Partners, in 2011 YOOX launched a project aimed at creating an Information management Security Management System (ISMS) based on the ISO/IEC 27001 standard. This framework aims to guarantee a high level of security YOOX also seeks to keep its Customers satisfied through efficient through the introduction of a formal internal information risk analysis management of orders, deliveries and returns. The investments and risk management process, as required by the methodology made to update its logistics platform are aimed at ensuring adopted. operating efficiency, respecting delivery deadlines and protecting The risk analysis allows the Information Risk Committee, a the Environment. dedicated internal body, to carry out quarterly assessments of risks In order to facilitate growth, in February 2013 the Group completed that could impact information integrity or confidentiality, and take the full automation of its techno-logistics platform, a project that any necessary preventive or corrective measures. was begun in late 2010, resulting in improved order handling. The system was designed to incorporate and satisfy all regulatory The new platform allows the Group to efficiently manage the requirements concerning information governance that are applicable peak demand experienced at certain times of the year (e.g. at to the Company, whilst also sharing the best technological Christmas) and to achieve excellent punctuality of deliveries to solutions and techniques adopted. The overall framework provides Customers, with 99.4% of orders currently being delivered on time. 2. market 65 99.4% OF DELIVERIES ON TIME

HANGING GARMENTS SHOES

WAREHOUSE WAREHOUSE

• Opened in 2013 • Opening in 2015 SHUTTLE SERVICE • Equipped with • Equipped with independent shipping independent shipping capabilities capabilities • Semi-automated • Semi-automated with RFid technology and with RFid technology and automated conveyors automated conveyors HANGING GARMENTS SHOES • 24,000 m2 • ~20,000 m2 • Leased WAREHOUSE WAREHOUSE • Leased

HANGING ITEMS-ONLY FOLDED GARMENTS & BULKY GOODS SHOE-ONLY ORDERS AUTOMATED DISTRIBUTION CENTRE ORDERS

MULTIPLE CATEGORY ORDERS & FOLDED-ONLY ORDERS 66 SUSTAINABILITY REPORT 2013

When implementing the project, the Group took account of the environmental compatibility of the measures involved, in line with its eco-friendly policies designed to save energy both now and in the future. The strategic management of its logistics “Lego Strategy” is based on a modular approach consisting of the following aspects:

SCALABILITY FLEXIBILITY YOOX’s warehouse space can be easily expanded according to YOOX’s logistics platform can be quickly and easily adapted to business needs and with limited investment by capitalising on meet changing business needs (changes in the product category the location of our Bologna logistics centre mix, changes in the pace of growth, development of new businesses, etc.)

SPECIALISATION The know-how and expertise we have accumulated through managing various warehouses specialising in different logistics categories (folded items, hanging items, shoeboxes, etc.) means we can constantly improve efficiency and time to market

LONG-TERM RISK AVERSION The duration of the logistics and distribution platform has been Reduced dependency on a single warehouse for our storage extended until 2019/20 capacity and order fulfillment 2. market 67

In addition to the protection given to consumers pursuant to the regulations in force in European Union member states, the YOOX Group has always offered its Customers a quick and transparent returns policy. The returns management phase includes receiving products at the Group’s logistics centres and effecting refunds to end Customers. All YOOX websites have a specific area dedicated to returns, which gives clear, detailed instructions on the applicable terms and conditions and on how to return a purchase, as well as explaining how Customers can track the progress of the delivery, the acceptance of the returned item at the warehouse and the status of their refund. In order to make the returns service a quick and easy process, YOOX also includes a pre-printed label with all orders so that Customers can conveniently return any purchase simply by booking a pick-up time for the package. 68 SUSTAINABILITY REPORT 2013 37 MONO-BRAND ONLINE STORES

• A logistics system designed specifically for fashion 2.3 Partners merchandise, with hubs in three continents and delivery to over 100 countries; 2.3.1 Managing relationships with • A complete mobile offering; mono-brand online store Partners • Premium Customer Care; • A unique combination of creative skills, web usability and user Since 2006, YOOX has designed and managed mono-brand interface design for the planning and design of online stores; online stores for leading fashion brands looking to offer their • Unique expertise in web & social media marketing on a global latest collection on the Internet. The Group is a Partner of Kering level and the ability to handle everything from search engine (formerly PPR Group), with which it has set up a joint venture marketing to acquisition campaigns on social media and other dedicated to managing the online stores for the many brands social networks (e.g. affiliation, retargeting). owned by the Kering Group. As at the end of 2013, YOOX had a total of 37 active online stores, including the 7 managed by the joint venture with Kering.

YOOX provides its Brand-Partners with the benefit of its 13 years' experience of managing luxury e-commerce and cutting-edge technological and logistics infrastructure. This enables the Group to create value and sales growth, as well as aiming to transform the shopping experience into a genuine brand experience for the end Customer.

The YOOX Group offers its Brand-Partners a complete solution including: • A team of Internet Retailing professionals with full command of e-commerce dynamics and an extensive knowledge of fashion and its means of communication; • A customised technology platform, developed over more than 13 years, that is capable of handling millions of orders each year and the wealth of content from the world of fashion available on the online stores; 2. market 69

EMPOWERMENT Through YOOX Group, Brands keep control over their global channel strategy and QUALITY gain full ownership of their INNOVATION POWER Customisable platform to convey unique online flagship store YOOX acts as the Brands’ brand identities, matching luxury Innovation Lab in the fields of user customers’ expectations through experience and new technologies applied a best-in-class service to luxury e-commerce

SKILL SCALE 13-year experience in global luxury Brands can access the operational e-commerce available to complement and THE MONO-BRAND PROPOSITION: EMPOWERING efficiencies arising from YOOX’s scale

breed Brands’ internal capabilities BRANDS, WHILE SHARING SKILL AND SCALE (shipping rates, handling fees, etc.)

GLOBAL REACH WITH EASE AND SPEED TO MARKET LOCAL EXPERTISE YOOX Group’s solution allows for a global Coverage of over 100 countries turnkey set-up minimising worldwide, with highly localised approach channel-specific hurdles in key fashion markets INCENTIVE ALIGNMENT Long-term partnership based on revenue sharing agreement, ensuring full alignment of incentives of both parties

YOOX pays special attention to managing relations with its With a view to constantly engaging in dialogue and sharing Brand-Partners in order to develop stable, long-term relationships experiences, YOOX again held several meetings with its Partners based on trust and the sharing of experience and expertise. during the year in order to assess the results of their online stores The constant attention to its Partners’ needs is one of the in comparison with industry benchmarks and to propose strategies distinctive aspects of YOOX’s online store management. aimed at improving their performance. 70 SUSTAINABILITY REPORT 2013

YOOX is committed to fostering a culture of sustainability in its supply chain management, focusing particularly on social and environmental aspects. YOOX expects its suppliers to behave in an ethical manner

Self-assessment questionnaire 2.4 Suppliers for online store Partners

In 2013, YOOX developed a self-assessment questionnaire for 2.4.1 Sustainability of its online store Partners, with a view to evaluating their internal Suppliers’ relationships management of various aspects of governance, reporting, quality management, environmental management and human rights. Experience sharing and long-term stability are among the key The purpose of the questionnaire is to create opportunities for elements that characterise YOOX’s relationships with its Suppliers. structured dialogue aimed at engaging and sharing experiences YOOX is committed to fostering a culture of sustainability in its with the Partners as YOOX Stakeholders. The questionnaire supply chain management, focusing particularly on social and responses will enable YOOX to get to know its Partners better and environmental aspects. to launch new measures in 2014 aimed at sharing its approach to sustainability. YOOX expects its Suppliers to behave in an ethical manner. For this reason, all agreements between YOOX and its Partners make them aware of the YOOX Code of Ethics, which sets out its corporate values, and require compliance with said code. The Group’s supply contracts also contain specific clauses that provide for compliance with the rules and principles set out in its Organisational, Management and Control Model pursuant to Legislative Decree 231/01. Buyers are required to sign an "affidavit letter", which specifically commits them to complying with the regulations, the Code of Ethics and the procedures that the Company has adopted for managing commercial relations with its Suppliers. 2. market 71 More than 5,000 brands on yoox.com

YOOX's commitments to its Suppliers The process of selecting Suppliers and defining conditions of procurement is based on the criteria of legality, competition, The Group's management of Supplier relations is based on the objectivity, probity, impartiality, fair pricing, and quality of goods following shared values and rules of conduct: and/or services. Aspects such as Suppliers’ service guarantees and the respectability and legitimacy of Suppliers’ operations are assessed, in keeping with legislation on the prevention of money laundering and receiving stolen goods. More generally, before Acting with transparency, probity and establishing a supply relationship, YOOX obtains commercial and fairness in contractual relations financial information and references that allow it to carry out a preliminary analysis on the trustworthiness of the Supplier in question. High-quality supplies Focus: purchases for yoox.com Guaranteeing impartiality in selecting Procurement in 2013 for the multi-brand online store yoox.com suppliers was carried out with an international portfolio of around 2,1005 Suppliers for over 5,000 brands. YOOX contributes heavily to economic growth in the areas in which it operates: 98% of its Ethical conduct products are made in Europe and 85% of its Suppliers are Italian, ranging from large fashion and design houses to local start-ups and artisans which have always worked with YOOX. Promoting a focus on sound environmental and sustainability practices 2.4.2 Focus on product quality and sustainability Respect for workplace health and safety One of the YOOX Group’s hallmarks is the high quality and authenticity of all the products sold via its online stores, which Compliance with the payment terms agreed it guarantees through direct, transparent relationships built up over several years with designers, manufacturers and authorised retailers.

5 This figure refers solely to Suppliers of goods for yoox.com and does not include thecorner.com, shoescribe.com and all the online stores. 72 SUSTAINABILITY REPORT 2013

YOOX is committed to developing Caring for the environment includes being part of the a commercial policy that is increasingly sensitive to international Fur Free Retailer Program the management of social and environmental impacts

The purchasing process begins with a careful selection of in coordination with the Italian Anti-Vivisection League (LAV), is a products, taking into account specific qualitative and economic tangible sign of the gradual improvement in the Group’s approach criteria. to sustainability issues. Before going on sale, all products are subject to rigorous quality The Group intends to promote commercial policies that respect checks by a team of experts to ensure that they meet the Group’s animal rights for its three multi-brand online stores (yoox.com, high standards. Strict operational guidelines have been drawn up shoescribe.com and thecorner.com), and will not sell items and at Group level, identifying the procedures and criteria to follow accessories containing animal fur on those sites. and the aspects to evaluate when carrying out product checks. More specifically, with regard to the three multi-brand online Once they have successfully undergone these strict checks, the stores, in 2014 YOOX undertakes: items are security tagged to protect them against attempted • not to create, distribute or sell any accessory, decoration or counterfeiting. other item that contains animal fur; • not to purchase any accessory, decoration or other item that QUALITY contains animal fur; • to obtain from its Suppliers and/or Manufacturers a reliable certification stating that the fur is not animal fur, if it intends to sell products containing synthetic fur. Value for money originalitY In order to implement the commitments deriving from the signing Guiding criteria of of the Retailer Commitment Against Fur, YOOX intends to define YOOX's purchasing processes specific internal checks on all relevant corporate processes (e.g. purchasing, quality control, databases). In addition to devising communication Authenticity Saleability and training activities for staff, YOOX will expand its contractual standards for product purchasing. With regard to inbound and quality control activities, The Company is committed to developing a commercial policy the guidelines already in use for product that is increasingly sensitive to the management of social and checks will be expanded. environmental impacts. The “Fur Free” project, which will be launched in the second half of 2014, is part of this approach, and the Group's formal compliance with the international Fur Free Retailer Program promoted by the Fur Free Alliance (FFA), 2. market 73

YOOX stands out as a truly public company with a widespread shareholder base and a free float of 82%

At 31 December 2013, the share capital was Euro 582,073.96, 2.5 Shareholders represented by 58,207,396 ordinary shares without nominal and Lenders value, including 56,764 treasury shares and 22,870,027 shares accounting for 39% of the capital which were held by 10 major Shareholders with direct or indirect stakes of 2% or more each. 2.5.1 Protection of Shareholders and the financial community Number of shares 2013 2012 2011 In the context of Italian listed companies, which are often Total number 58,207,396 57,312,788 53,074,112 characterised by the presence of a dominant shareholder or a of shares controlling family, the YOOX Group is a rare example of a truly public company in Italy. In light of this distinctive feature and of Based on an analysis carried out in March 20147, the Group’s its global presence, the Group recognises the financial community shareholder structure is characterised by a strong presence as an extremely important Stakeholder and, therefore, strives of institutional Investors, which hold almost 68% of the share to engage in constant, positive dialogue through its senior capital, with a significant component ofinternational Investors. management and its Investor Relations division, which was More than 74% of institutional Shareholders are in fact of Anglo- established even before the Group’s stock market debut. Saxon origin, with the US and the UK representing the first and the second countries by origin, respectively. Italian institutional Shareholder composition Investors represent less than 2% of the total.

The Group’s ownership structure is characterised by a widespread shareholder base. With a free float of around 82%6 at 31 December 2013, YOOX ranked second among the more than 160 companies in the main Italian indexes FTSE MIB, FTSE Italia Mid Cap and FTSE Italia STAR, excluding the financial and insurance sector.

6 The stakes of Federico Marchetti, Red Circle S.r.l. Unipersonale, Red Circle Investments S.r.l. and Balderton Capital, and the treasury shares held by YOOX S.p.A., have been excluded for the purposes of calculating the free float. 7 Source: Georgeson, Intelligence sugli Assetti Proprietari del Gruppo YOOX [Information on the YOOX Group’s Ownership Structure] (March 2014). For the purposes of analysing the geographic breakdown of shareholders, the 67.55% of the share capital held by institutional Investors was analysed. As of the publication date, no shareholder agreements are in place between Federico Marchetti, Red Circle S.r.l. Unipersonale, Red Circle Investments S.r.l. and Balderton Capital, which are referred to as “Key Shareholders”. 74 SUSTAINABILITY REPORT 2013

Around half of its institutional shareholders are based in the US and almost one fourth in the UK

Breakdown of Shareholder structure by Investor type

KEY SHAREHOLDERS

0.1% 17.6% INSTITUTIONAL INVESTORS RETAIL INVESTORS 14.7% TREASURY SHARES

67.6%

Breakdown of institutional Shareholders by geographic market8

1.4% ITALY 1.4% ITALY INTERNATIONAL 7.6% USA UK

18.7%18,7% REST OF EUROPE ROW

49.3%

23.0% 98.6%

8 Not including Balderton Capital. 2. market 75

in 2013 the YOOX stock was included in two ethics indexes: the FTSE ECPI Italia SRI Benchmark and the Standard Ethics Italian Index

Socially responsible Investors SHARE PERFORMANCE and ethics indexes The Group has been listed on the STAR segment of Borsa Italiana Some of YOOX’s Shareholders have adopted ethical investment since 3 December 2009 (ISIN: IT0003540470). Thanks to the strong criteria, in particular: Natixis, F&C Management and Etica SGR. performance of the stock since then, YOOX joined the FTSE Italia As a result of the Group’s long-standing commitment to promoting Mid Cap index9 on 20 September 2010, having previously been on sustainable growth and protecting the Environment, the YOOX the FTSE Italia Small Cap index10, and debuted on 23 December stock has been included in 2 ethics indexes in 2013: 2013 in the FTSE MIB, the primary index of Borsa Italiana comprising Italy’s 40 largest companies by market capitalisation and liquidity. During the year, the stock varied from a low of Euro 11.85 to a high of Euro 32.60, which it reached on the last day of trading on The FTSE ECPI Italia SRI Benchmark index promoted by ECPI, 30 December 2013: with a 173.5% share price increase from the a company which is active in environmental, social and closing price of Euro 11.92 on 28 December 2012 (the last day governance (ESG) research, awards ratings and constructs of trading in 2012), YOOX ended the year as the best-performing sustainability indexes. The index comprises shares of the stock on the FTSE MIB in 2013 and also reconfirmed a better companies in the top 100 by market capitalisation on the Mercato performance than those of the benchmark indexes (the FTSE MIB, Telematico Azionario (the Italian screen-based trading system) FTSE Italia STAR, FTSE Italia Mid Cap and indexes representing which demonstrate notable ESG practices; the luxury-goods11 and e-commerce sectors12).

The Standard Ethics Italian Index promoted by Standard Ethics, a European rating agency which exclusively evaluates listed companies based on their ESG qualities. The index, which was launched on 1 January 2014, comprises the 40 companies in the FTSE MIB, weighted according to their degree of compliance with international guidelines on sustainability, corporate governance and corporate social responsibility from the Organisation for Economic Cooperation and Development, the European Union and the United Nations.

9 The FTSE Italia Mid Cap index comprises the 60 biggest companies by market capitalisation and liquidity outside the FTSE MIB. 10 The FTSE Italia Small Cap index comprises companies outside the FTSE MIB and FTSE Italia Mid Cap that are eligible following the application of specific liquidity and free float criteria. 11 The index representing the luxury-goods sector includes LVMH, Kering (previously PPR), Compagnie Financière Richemont, Hermès, Brunello Cucinelli, Prada, Ferragamo, Moncler, Tod’s, Poltrona Frau, Luxottica and Safilo. 12 The index representing the e-commerce sector includes ASOS, Amazon, Blue Nile, eBay and Start Today. 76 SUSTAINABILITY REPORT 2013 +173% 23 December YOOX closed the year YOOX enters the FTSE MIB as the best performing stock of the ftse mib in 2013

Share and stock exchange data Stock market milestones 2013 2012 Closing price at year end (€) 32.60 11.92 • 3 December 2009: Highest closing price (€) 32.60 12.58 YOOX is listed on the Milan Stock Exchange on the STAR segment Lowest closing price (€) 11.85 7.32 • 20 September 2010: Market capitalisation at year end 1,897.6 683.2 The stock joins the FTSE Mid Cap index (€ million) • 23 December 2013: Data: the closing price at year end, highest closing price and market YOOX debuts on the FTSE MIB capitalisation at year end as of 30 December 2013; the lowest closing price refers to 8 January 2013 • 23 December 2013: YOOX joins the FTSE ECPI Between its stock market debut and 30 December 2013, YOOX Italia SRI Benchmark ethics index saw its stock rise by 658.1% compared with its IPO price (Euro • 27 December 2013: 4.3), outperforming the FTSE MIB, FTSE Italia STAR and FTSE The stock enters the Standard Ethics Italian Index Italia Mid Cap indexes, as well as the benchmark indexes in the e-commerce and luxury-goods sectors. YOOX has also been the best performer among the companies in the FTSE Italia All-Share index in terms of share performance since its IPO on the Milan Stock Exchange13 (+599.6%).

13 Reference period: 3 December 2009 - 30 December 2013. Source: Factset (for the stock market data) and Borsa Italiana (for the composition of the indexes). 2. market 77

YOOX share performance compared with the main benchmark indexes in 2013

275 173.5%

250

225

200

175

55.7% 150 48.8% 40.8%

125 16.6% 9.3% 100

75 28/12/12 15/1/13 1/2/13 21/2/13 11/3/13 29/3/13 17/4/13 3/5/13 23/5/13 11/6/13 28/6/13 17/7/13 5/8/13 23/8/13 10/9/13 27/9/13 17/10/13 4/11/13 22/11/13 11/12/13 30/12/13

YOOX S.p.A. E-commerce Index Luxury Index FTSE MIB FTSE Italia Mid Cap FTSE Italia STAR Source: Factset. Reference period: 28 December 2012 – 30 December 2013 78 SUSTAINABILITY REPORT 2013 +658.1% share price increase as of 31 December 2013 compared with the IPO price

YOOX share performance compared with the main benchmark indexes SINCE THE IPO 700 599.6% 650

600

550

500

450

400

350

300 170.0% 250 131.8% 200

150 53.2% 6.9% 100 -16.1% 50

0 31/12/09 15/2/10 30/4/10 14/7/10 24/9/10 10/12/10 22/2/11 6/5/11 21/7/11 3/10/11 16/12/11 29/2/12 11/5/12 27/7/12 9/10/12 21/12/12 7/3/13 20/5/13 2/8/13 16/10/13 30/12/13

YOOX S.p.A. E-commerce Index Luxury Index FTSE MIB FTSE Italia Mid Cap FTSE Italia STAR Source: Factset. Reference period: 3 December 2009 – 30 December 2013

Relations with the financial community Stakeholders with the information they need to understand the Company, its business and its strategy. In addition, in order to YOOX has always engaged in constant dialogue with the entire ensure consistency in the information provided to financial media, financial community (sell- and buy-side analysts, fund managers, in 2013 the Investor Relations department assumed responsibility business and financial media), and this has served as the primary for the relationships with the Italian and international business inspiration for its market communication strategy, which is based and financial press, resulting in the creation of the new Investor on the principles of transparency, timeliness, accuracy and Relations & Financial Communications department. equal access to information and which aims to provide all 2. market 79 14 Brokers domestic and international, cover the YOOX stock

In 2013, YOOX hosted its first Capital Market Days, three days in which top management presented its future strategy, illustrated “Grand prix for best overall investor the most recent developments in its technology and logistics relations” platform, and showed participants its Operations during a site visit at the Interporto (Bologna) logistics centre. The managers of As a testament to its commitment to the the individual business units also took part in the events in order relations with the financial community, in to answer participants’ questions. The events were attended by June 2013 the YOOX Group won the “Grand a large number of Analysts and Investors, and the webcast of the prix for best overall investor relations” in the presentation, which is available on demand on the website, has small-cap category at the IR Magazine also registered many viewers. Awards – Europe 2013, an annual event that In addition, the ad hoc roadshows and conferences organised celebrates excellence in Investor Relations. during the year enabled the Investor Relations team to both The 2013 edition of the awards saw interviews with 500 consolidate relations with Investors in its established roadshow portfolio managers and analysts across Europe. destinations - Milan, London, New York, Boston, Paris, Frankfurt and Geneva - and to make new potential Investors in cities such as Chicago and Copenhagen aware of the Group’s equity story Analyst coverage and the evolution of its business. Lastly, the team took care of communicating quarterly results to Since the IPO, the Investor Relations team has been continually the market and organising the conference calls held following the committed to increasing the number of analysts that follow the Board of Directors' meetings to approve results. Also in 2013, the YOOX stock, which, despite the major restructuring in the banking Investor Relations & Financial Communications department had sector in previous years, has wide analyst coverage consisting always been supported by the Founder and Chief Executive Officer of 14 domestic and international brokers. As of 31 March 2014, and the Chief Financial Officer in all conference calls with Analysts those covering the stock include Goldman Sachs International, and institutional Investors, underlining the strategic importance Mediobanca, Equita, Intermonte, Gruppo24Ore, Bank of America that YOOX attaches to its dialogue with the financial community. Merrill Lynch, Deutsche Bank, Citi, Kepler Cheuvreux and N+1 Singer, as well as Exane BNP Paribas, Banca IMI, DSF Markets and MainFirst, which all began their coverage since the beginning of 2013. Fidentiis has also been covering the YOOX stock since 2012, albeit without rating. More than 140 reports, previews and updates on YOOX were published in 2013, an increase from the 120 published in 2012. As of the end of the year, the stock had positive recommendations 80 SUSTAINABILITY REPORT 2013

from half of the Analysts and an even split of neutral and negative receive if dividends were distributed. The Group also believes it recommendations from the remaining half. The average target to be prudent and in the interests of all Stakeholders to retain the price was Euro 27.7 (Euro 12.7 in 2012). Lastly, as of 31 March flexibility of being able to use its own available cash to fund its 2014, YOOX was included in the Goldman Sachs Pan-Europe activities or other investment plans. Conviction Buy List for the 36th consecutive month. indicators Analyst coverage 2013 2012 2011 2013 2012 2011 Earnings per share (€) 0.22 0.18 0.19

Italian (no.) 5 5 5 Price-to-earnings ratio 150.36x 67.09x 44.26x International (no.) 8 6 7

Recommendations (no.) 13 11 12 Communication with the financial community

positive 7 7 6 The Group’s communication activities with the financial community negative 3 4 4 begins each year with the publication of its financial calendar in neutral 3 0 2 January. This enables the community to know, well in advance, Target price (€) the dates of the Group’s major events, such as the Shareholders’

min. 16.0 9.0 8.5 Meeting, the publication of financial results, its main roadshows and the conferences that it plans to attend. max. 41.5 21.5 16.8 All key documents and information are promptly made available to average 27.7 12.7 11.7 the market and in full compliance with: • the principles of transparency, timeliness and accuracy of information to which the Investor Relations team adheres; Dividend policy • the laws and regulations on disclosing privileged information, the procedures on disclosure of confidential information, the The YOOX Group believes that investing in both innovation and Consob procedures on disseminating price-sensitive information the strengthening of its multi-channel offering and global logistics and the regulations on internal dealing. platform is essential to achieve its goal of being the leader in its sector in the coming years. The Group has therefore decided, All communications are then published in real time on the Investor since its IPO, to reinvest its cash to improve and consolidate its Relations section of the Group’s website in order to guarantee market position in the belief that the return for Shareholders easy access to important Company's information and prevent under this policy will be considerably higher than what they would information asymmetry. 2. market 81

Conference calls with Analysts and institutional Investors are organised after the Board of Directors' meetings to approve annual YOOX roadshows and interim financial statements. The details of these conference calls are published in the relevant press release. YOOX is always looking to take its roadshows to new Each year, the Company organises and participates in many financial centres in order to promote the Group and its equity conferences, roadshows and meetings, which are often attended story to new potential investors. Milan, London, New by YOOX’s Founder and Chief Executive Officer and other members York, Boston, Paris, Geneva and Frankfurt are already of top management, such as the Chief Financial Officer, General established destinations and, in recent years, YOOX has Manager and Chief Operating Officer. In 2013, in addition to the also visited new cities such as Dublin, Vienna, Zurich and Capital Market Days, the Company took part in many roadshows Copenhagen, as well as Chicago in 2013. and conferences in Italy and abroad, with a constantly high In 2013, YOOX also took part in: involvement of the top management. As has become traditional in • the STAR Conference organised by Borsa Italiana in Milan recent years, YOOX took part in Borsa Italiana's STAR Conference for the fourth consecutive year; in Milan, the Deutsche Bank Global Consumer & Luxury • the Deutsche Bank Global Consumer & Luxury Conference Conference in Paris and the Bank of America Merrill Lynch Global in Paris and the Bank of America Merrill Lynch Global Consumer & Retail Conference in London, as well as making Consumer & Retail Conference in London for the third its debut in the Chicago financial centre by way of an ad hoc consecutive year. roadshow. The Group also ensures constant dialogue with buy- and sell-side Analysts thanks to the large number of conference calls, one-to-one and group meetings organised at its offices in Milan and Bologna, and also to the daily availability of the team via e-mail and telephone. 82 SUSTAINABILITY REPORT 2013

In the last three years the total number of contacts was over 2,250, of which more than 900 in 2013

Financial communication 2013 2012 2011 Number Number Number Number Number Number of contacts of contacts of contacts

Conference calls on quarterly results 4 210 4 175 4 160

Capital Market Days and webcasts 1 155 0 0 International conferences 5 110 6 160 5 110 Roadshows 14 240 14 220 10 150 of which: in Italy 5 85 4 65 4 45 abroad 9 155 10 155 6 105 Individual and group meetings 50 30 35 Conference calls and meetings with analysts 125 80 95 Conference calls with investors 40 65 60 2. market 83

CONFERENCE CALL QUARTERLY RESULTS

23% 24% CAPITAL MARKET DAYS 31% ROADSHOW & CONFERENCES MEETINGS AND CALLS WITH ANALYSTS & INVESTORS

38%

52% 42%

17%

22% 24% 27%

2013 2012 2011

2.5.2 Relations with Lenders Both of these are committed credit lines, meaning that the Lenders are not able to demand early repayment. The Group aims to maintain sufficient levels of liquidity and This guarantees medium- and long-term financial stability, while available funds to sustain the growth of the business and ensure also ensuring flexibility. Healthy relations with its financial the timely fulfillment of its obligations. Partners have enabled YOOX to obtain highly flexible revolving and In pursuit of this objective, YOOX adopts a flexible approach - amortising lines of credit. typical of the dynamic nature of the business in which it operates Medium-and long-term investments in R&D and property, plant - involving the use of amortising lines of credit, which require and equipment are financed by dedicated fixed-rate lines of credit, loan repayments to be made in accordance with a pre-established in order to prevent interest rate risk. amortisation schedule, and revolving lines of credit, which make it possible to repay individual drawdowns so that the full amount of credit is restored. 84 SUSTAINABILITY REPORT 2013 3. people 85

3. people 86 SUSTAINABILITY REPORT 2013 people

3.1 YOOX people

3.1.1 Human Resources management These principles underpin selection, management, development, training and internal-communication processes, relationships with YOOX’s People are the heart and soul of the Group. Working People and the focus on workplace health and safety issues. passionately across every time zone, they are a young team that continues to grow both in number and expertise. From the USA to Hong Kong, from fashion to technology and from web marketing to Fundamental principles of YOOX’s human logistics, they are united in their enthusiasm to be part of a unique resources management project.

YOOX’s People strategy focuses on talent and providing Fairness Employees with the opportunity to fulfill their potential through and equal innovative projects on an international stage. opportunities The People management strategy at YOOX aims to foster a collaborative and professional working Environment that gets the Meritocracy and appreciation of Legality and most from individual skill sets and is conducive to growth. In honesty line with its approach to sustainable development in its business, talent YOOX is constantly investing in its staff, and fosters a work Environment brimming with passion, creativity and energy.

YOOX has enjoyed significant international growth in recent years, and it has established a reputation for proper, transparent, Probity and Professionalism impartial and honest relationships. transparency and trust

The Company has become increasingly important to value diversity when managing People; after all, different points of view can add Prevention value and contribute to a greater whole. of potential YOOX complies with existing Italian legislation and promotes the conflicts of standards of human resources management and the principles interest set out by the Group’s Code of Ethics to ensure that the rights enshrined in the Universal Declaration of Human Rights and the principles of the conventions of the International Labour Organization are upheld in each country in which it operates. 3. people 87 713 +52% EMPLOYEES team growth OVER THE LAST three years

3.1.2 Breakdown of workforce YOOX aims to reconcile its international status with its strong Italian roots – 88% of its Employees are based either in Bologna The YOOX Group comprises business-minded People with a focus or in Milan. on results and excellence. The success and growth of the Group The Company believes that a stable and long-lasting employment is underpinned by the commitment of its People across the offices relationship is crucial to the growth of the business, as well as in Bologna, Milan, New York, Tokyo, Paris, Madrid, Shanghai and being an important motivational tool. The percentage of Employees Hong Kong. An average age of 32 and an average seniority, in on permanent contracts was 87% in 2013, confirmation of the the Company of 2.9 years made for a youthful workforce in 2013. effectiveness of the YOOX corporate policy that aims to ensure and strengthen the stability of working relationships and to invest TRENDS IN THE TOTAL NUMBER OF EMPLOYEES in our resources over the long term.

TOTAL WORKFORCE (NO. OF EMPLOYEES AND CONTRACTORS) 2013 2012 2011

713 male female male female male female Employees 314 399 255 339 206 263 594 469 Temporary 10 22 1 4 19 43 workers Project workers 0 3 - 2 2 10 Total by gender 324 424 256 345 227 316 2011 2012 2013 Total 748 601 543 NB: the total number of Employees for 2013 does not include fixed-term contracts that reached their natural conclusion as at 31 December 2013

Fixed-term contracts converted into permanent The YOOX team comprised 713 Employees in 2013, up by 20% contracts (no.) compared with 2012 and therefore almost doubled compared with 2013 2012 2011 2011, with a rise of 52% over the last three-year period. These Number of contracts 66 53 29 figures are testament to the Company's desire to support the converted into growth of its business by continually investing in the workforce. permanent contracts 88 SUSTAINABILITY REPORT 2013 87% 32 of employees on a permanent contract employees’ average age

YOOX People: the figures

Total workforce (no. of employees and contractors) Employees by age range (no.) 2013 2012 2011 2013 2012 2011 male female male female male female <30 261 226 184

Executives 23 5 15 6 20 4 30-40 388 318 247 Middle managers 27 26 24 25 17 17 >40 64 50 38 Office workers 236 311 194 257 155 207 Total 713 594 469 Abroad 28 57 22 51 14 35 Total by gender 314 399 255 339 206 263 Total 713 594 469

Employees by type of contract (no.) Average seniority (years) 2013 2012 2011 2013 2012 2011 Permanent 617 492 392 Average seniority 2.88 2.71 2.67

Fixed-term 96 102 73 Apprenticeship - - 4 Total 713 594 469

Part-time and full-time employees (no.) Employees by geographical area (no.) 2013 2012 2011 2013 2012 2011 Full-time 671 558 437 Italy 628 521 420

Part-time 42 36 32 Abroad 85 73 49 Total 713 594 469 Total 713 594 469

NB: the headcount does not include the Chief Executive Officer of YOOX S.p.A., interns or contractors NB: the total number of Employees for 2013 does not include fixed-term contracts that reached their natural conclusion as at 31 December 2013 3. people 89 34 226 different nationalities EMPLOYEES hireD in 2013

3.1.3 Hiring policies The YOOX workforce is characterised by a wide range of education, professional experience and cultural backgrounds. In YOOX’s hiring policies aim to attract the best People, ensuring total, 34 nations are represented within the Group, from Argentina that the selection process prioritises professionalism, reliability, and Japan to Russia and New Zealand. expertise and the technical skill set required for each vacancy. The most important qualities are dynamism, adaptability, and The selection and recruitment process is gradually evolving towards specialist skills in the fashion and luxury-goods sector and in new international candidates. It consists of assessing the attitude and technologies. motivation of the candidates and analysing their technical and YOOX hired 226 People in 2013, with women making up around professional capabilities. 53% of the total intake. Some 82% of the new recruits were The soft-skills assessment evaluates the key broad skills expected of Italian, and approximately 50% were under 30. all YOOX Employees, as well as their affinity with corporate values.

Phases of the YOOX selection process

PLANNING FOR LAUNCH OF THE SELECTION SELECTION HIRING NEW HIRES RECRUITMENT AND PHASE 1 PHASE 2 SELECTION PROCESS •Preparation of a "New •Filling out of the Recruiting •Activation of the recruiting •Presentation of shortlisted •Negotiation and proposed Hires Plan" that lists the Contract, in which the HR channels candidates to Line terms position, department and Business Partner and Line •Screening of CVs Manager/Director •Presentation of the letter area in which new hires Manager concerned agree •Organisation of interviews •Organisation of interviews of appointment to the are sought, as well as the on the characteristics with candidates and of shortlisted candidates candidate applicable contract type, candidates should have testing phase with Line Manager/Director •Signing of the contract sustainable cost and hiring and the recruiting process •Identification of shortlisted and examination of their period to be launched candidates technical skills •Identification of the selected candidate 90 SUSTAINABILITY REPORT 2013

An international vision, specialist expertise and an affinity with corporate values 16,117 are the rewards of joining YOOX Group applications received in 2013

In accordance with the principles of transparency, equal Internal growth is a key factor for the Company, which has opportunities, non-discrimination and diversity, in recent years the implemented a job posting system for vacancies. In addition, partly Group has stepped up its use of new talent attraction channels. with a view to consolidating the global identity of the Group, The use of social media such as LinkedIn now complements internal-mobility programmes are under way aimed at promoting the procurement and analysis of candidates through the and getting the most out of international careers. corporate website. YOOX has also strengthened its ties with schools and YOOX sets a good example on the use of internships. The most Universities, with which it has specific agreements in place. junior positions are filled by six-month internships, at the end of If it needs to fill particularly crucial positions, YOOX may also use which the intern is hired if they receive a positive appraisal. During head hunters and recruitment agencies with proven experience 2013, 20 interns were given employment contracts. in technology and fashion. The growing number of applications received is testament to the Where possible, YOOX tries to consider a candidate’s proximity level of interest in the Company. More than 16,100 applications to the work premises, particularly for technical and operational were received in 2013, whether unsolicited or in response to positions, but there is no specific Group policy aimed at favouring vacancies published on the corporate website. candidates living locally to its corporate offices. In 2013, 45% of the workforce at the Milan site lived locally, while 71% of Employees at the Bologna logistics centre and the Zola Predosa applications received site lived in and around Bologna. APPLICATIONS RECEIVED (NO)

16,117

10,760

3,714

2011 2012 2013 3. people 91

In 2013 the home-working programme 56% was launched of employees are female

During 2013, 110 Employees left the company14, of whom 55% During the first 6 months the experience will include an were women and 60% were aged between 30 and 40. Staff internship, which involves not only learning on the job but also turnover was 15% in 2013, down on the previous year. training in the classroom with expert YOOX managers in order to gain a complete picture of the specific areas of responsibility and the reference market. Turnover (%) Over the next twelve months, the new graduates have 2013 2012 2011 the opportunity to come into contact with the various work Turnover 15 17 17 environments, thanks to a rotation between the various corporate NB: employees who left during the year / total employees at 31 December functions which will allow them to put themselves to the test daily and receive dedicated training for various corporate roles. YOOX STAGE Programme At the end of the programme, the recent graduates will have the opportunity to work in their first position in the company through YOOX Group continues to invest in the new generations. In 2014 a permanent contract. the Company will introduce its YOOX Stage Programme, the first Group Graduate Programme aimed at training and integrating The first version of theYOOX Stage Programme will be recent graduates, confirmation of the Group’s constant investment dedicated entirely to the commercial area which, from May in the new generations. 2014, will allow recent graduates to acquire the expertise and skills required to continue to work in positions in the commercial The Graduate Programme will be a real 360-degree corporate department of yoox.com at the end of the programme, in the experience, a structured training/work experience lasting buying, category management, pricing and commercial planning 18 months which will allow the selected graduates to acquire departments to name a few. not only specific professional experience in the field of fashion e-commerce, but also to gain a complete overview of the organisation, as well as culture and business of the Group, a leader in the industry, through specific focus on what YOOX involves, classroom-based sessions and on-the-job training.

14 Employees leaving on 31 December of each year are considered to have left during the following year. 92 SUSTAINABILITY REPORT 2013

YOOX’s People management strategy is centred on integration and respecting diversity

3.1.4 Diversity and well-being In accordance with Law 120/2011, this figure will be increased to at least 20% when the Board is next elected in 2015. YOOX’s People management strategy is centred on integration and respecting diversity. The equal treatment that YOOX offers to Following a pilot scheme started in 2012, as part of its its People manifests itself in the policy of non-discrimination on commitment to innovation and flexibility for Employees, YOOX the grounds of race, gender, nationality, sexual orientation, social launched a home-working programme in September 2013 with a status, physical appearance, religion and political orientation, both view to enhancing Employees' lives outside of work and providing in the selection process and in all of the Group’s activities. concrete tools to help them have a good work-life balance. Conduct at YOOX is inspired by the values of professionalism, integrity and mutual respect. Over 20% of applications received were approved, and new home- working agreements took effect in January 2014, giving priority to YOOX’s strong commitment to equal opportunities was reaffirmed those on maternity leave or with particularly demanding personal in 2013, when women made up 56% of its workforce – a figure or family situations. YOOX provides its home-workers with all the that has remained broadly stable over the last three years. Women equipment they need to work from home, including a mobile phone, represented 38% of middle managers and executives at the end of a laptop with VPN access and a broadband subsidy. 2013. One of the seven members of the Board of Directors is Last but not least, working remotely, which results in zero kilometres female (14%). since commuting is reduced, is perfectly in line with the Group’s environmental sustainability programme, YOOXYGEN. 3. people 93

In 2013 YOOX pursued its strong commitment to equal opportunities

In order to better integrate work and family life, YOOX provides all By entering into formal agreements with the relevant government Employees with a degree of flexibility in terms of the times they authorities, YOOX is gradually adjusting to legal provisions relating arrive for and leave work. Staff members for whom this flexibility to the employment of persons belonging to legally protected was not enough were put on annual part-time schedules. In 2013, categories. Specifically, in 2013 the Group entered into an 10 mothers took advantage of this part-time arrangement, while agreement with the Bologna provincial authorities regarding an 23 requests for parental leave were approved across the two employment programme for disabled peopled pursuant to Article Italian offices. 11 of Law 68/1999.

YOOX Group’s headquarters - the “Temple” of Technology, Innovation, Research & Development Department of Zola Predosa, Bologna. Credits: Carlo Furgeri 94 SUSTAINABILITY REPORT 2013

3.1.5 Compensation policy and incentive Pay levels vary according to position held, responsibilities and appraisal schemes assumed, skills acquired, performance and individual targets achieved. The foreign market is also used as a benchmark for defining compensation. In 2013, YOOX’s pay policies remained focused on ensuring In accordance with the Group’s strategic guidelines, the fixed competitiveness in the job market, in line with the objectives of component of compensation is defined and managed based on attracting talent, developing it and fostering loyalty among the selective criteria. workforce. YOOX has chosen to adopt a transparent and meritocratic The separate variable component of compensation ties the pay system for recognising the contribution that Employees make package to individual performance and Group profits, as defined in to the success of the business. It does this through a “total the Management by Objectives (MBO), Stock Option and Retention compensation” policy that aims to reward individual contribution plans. in different ways based on both specific aspects of performance and market best practice. Monthly salary, which constitutes the fixed portion of the compensation system and is paid in accordance with contractual provisions, is supplemented by performance-related financial rewards such as bonuses and rises.

Main purposes of the variable pay components

MANAGEMENT BY OBJECTIVES STOCK OPTION RETENTION To encourage involvement To incentivise top management to To incentivise key employees to stay and motivation to achieve predetermined achieve company profitability with the Group objectives and performance levels objectives through the creation of stock option plans 3. people 95

Once again in 2013, the performance evaluation system was the The performance evaluation system measures the value created main tool used to assess the contribution of Employees to YOOX’s by each Employee as they carry out their job. It consists of two success and growth. This system enables People to develop and different evaluation methods: ensures continual, transparent dialogue between each department • evaluation of skills; head and their team. • evaluation of achievements (MBO).

Main aspects of total compensation

Level of responsibility and criticality Strategic nature of the position of the skills

Total Compensation

Recognition Passion of individual ability for the job 96 SUSTAINABILITY REPORT 2013

This system provides the Company with objective, clear and In addition, in order to respond to demands for greater stability shared input data with which to calculate the variable component and certainty in variable compensation for the more operational of compensation for eligible Employees, as well as the most positions, in 2013 YOOX offered Employees at its Italian offices important indicators for starting staff development plans. with an employment contract framework equal to or lower than The “People & Process Management” aspect is considered Level 2 of the national collective agreement, and a maximum MBO particularly important for analysing the performance of managers, percentage of 10%, the option to forego the variable component who are evaluated both by their direct superiors and according to of their compensation in exchange for a guaranteed increase in their reviews, based on feedback received from a dedicated survey their gross annual salary of 50% of the maximum possible variable submitted in April 2013. component. In total, 101 out of a potential total of 254 Employees (around 40%) chose this option.

The figures below show the percentage of Employees who have A new appraisal process been formally appraised by the Company. As explained above, the significant reduction compared with previous years in the number In 2013, YOOX designed our new appraisal process based on of Employees evaluated is due to the option given to some of the international best practice. It will be implemented in 2014. workforce to forego the variable component of their compensation Under the new system, each appraisal is triple-checked at against a guaranteed increase in their annual salary. successive levels of seniority and each employee is evaluated in relation to their peers in each area of the Company. This Employees who received a formal system ensures complete transparency for employees as well performance evaluation (%) as the full involvement of the various departments. 2013 2012 2011 Employees evaluated 49 83 84 3. people 97

Investment in training represents YOOX’s continual effort to help its Employees to grow and to develop the key skills for generating value.

Average gross annual pay of women compared with that of •“Savings” men by employment status – Italian offices - YOOX staff can get favourable terms on personal loans, 2013 2012 2011 insurance policies and credit cards. Executives 90% 88% 87% - In line with its sustainable-mobility programme, YOOX offers its Employees the opportunity to buy season tickets for Milan Middle managers 96% 102% 98% public transport at favourable terms and discounted prices, Office workers 90% 91% 88% including the option to pay in instalments. • “Work” Benefits - A complimentary company credit card, with exclusive benefits for YOOX and a 45-day payment deferral to help Employees In April 2013, YOOX launched ENJOYOOX, a wide-ranging with their expenses. programme of benefits aimed at improving the quality of - YOOX Employees can get discounts on lunch and dinner at Employees’ lives. The programme offers opportunities and local eateries. services for people in the following main areas: •“Leisure & Family” 3.1.6 Development and training policies - Employees can get discounted cinema and theatre tickets. - YOOX staff can use the business travel agency service, Investment in training is part of YOOX’s continual commitment to with Customer support and discounted prices, for their help its Employees to grow and to develop the key skills needed personal holidays. for generating value. As testament to the growing importance attached to professional development and training activities, •“Health & Beauty” in 2013 YOOX set up a company Learning & Knowledge - In order to promote a healthy lifestyle and encourage Management department, which aims to provide a constantly Employees to take up sporting activities, YOOX offers evolving range of training courses developed in line with discounted memberships of affiliated local sports centres. business requirements. - On-site activities: Yoga and Pilates classes in the office and the gym located at YOOX’s headquarters in Zola Predosa. After mapping the training requirements of all Employees and holding one-to-one meetings, the new department drew up a detailed programme of training events that took place both in and outside of the headquarters. 98 SUSTAINABILITY REPORT 2013 15,469 hours of training provided in 2013

In order to satisfy the specific training requirements of each business In total, there were 15,469 training hours in 2013, with a area while encouraging networking and business development, particular focus on integrating new staff and helping them several Employees took part in a rich programme of national and to understand internal processes (24.5%), and on laws and international conferences and events. regulations (26.5%). On average, each Employee received 21.7 training hours in 2013. More specifically, excluding Workplace TRAINING HOURS BY SUBJECT AREA - 2013 Health and Safety training, executives and middle managers received an average of 37.6 training hours, while office workers INTEGRATION AND INTERNAL 11% PROCESSES received an average of 13.3 hours. In light of the growing LEGISLATION importance of training for growth and professional development, 11% 24.5% ORGANISATIONAL DEVELOPMENT as well as for compliance with legal requirements, Employees SPECIALIST TRAINING are able to provide feedback on the courses they have attended MANAGERIAL DEVELOPMENT through anonymous questionnaires collected and analysed by 14% LANGUAGES Learning & Knowledge Management. 26.5%

13% Design work took place in 2013 on the new “YOOXPEDIA” knowledge-sharing system, which has three broad functions: • a single, modern and easy-to-use repository of all internal training material (presentations, documents, processes, AREAS COVERED BY YOOX'S TRAINING PROGRAMMES activities, modules); • an associated e-learning system that is quick and easy to use; • MANAGERIAL TRAINING • a community space encouraging Employees to communicate Dedicated to middle management, covering issues such as Collaboration, and socialise with each other. People Management, Time Management and Public Speaking

• SPECIALIST TRAINING Helps employees to acquire specialist technical skills

• COMPULSORY TRAINING Covers Group-wide issues such as Model 231, the Code of Ethics, privacy and data security, and health and safety

• INDIVIDUAL COURSES Dedicated training and one-to-one courses on specific topics SUSTAINABILITY REPORT 2013 99

The sustainability report is part of the welcome kit given to each new hire to introduce them to social and environmental dimensions of the Group

Training for new HIREs and mentoring programmes

In 2013, YOOX continued to invest in progressive-training modules that Employees follow throughout their career at the Company, focusing particularly on the YOOXYZATION induction programmes aimed at new starters and on Mentoring programmes.

Inductions for new HIRES Mentoring The new YOOXYZATION induction programme for new hires The Mentoring programme started in 2012 continues, providing the includes a full day’s introduction to the Company, its business opportunity for talented young staff members at our Company to and its organisation. The other features of the induction be accompanied throughout their career by more senior colleagues programme include: who are trained mentors. Both sides benefit from the programme: • a day of training in Customer care processes and YOOX’s the mentee gains a better knowledge of the YOOX culture and approach to its Customers, “Customer Care and the Voice organisation as well as the chance to expand their internal of the Customer”; network, while the mentor gains exposure to a new way of • a day of training at the Interporto logistics centre aimed at thinking and working as well as the chance to develop new skills understanding the digital production process; and managerial experience. • a morning of explanations of the administrative issues affecting new starters once they join the company; • Y-Buddy!, a buddy programme in which a mid-ranking Employee monitors new starters during their first six months, meeting with them at scheduled regular intervals and offering themselves as a continual point of reference.

As part of this programme, each new hire receives a Welcome Kit. This kit comprises a folder which, in line with the YOOXYGEN environmental sustainability initiative, is made from recycled natural leather. The folder contains a copy of the sustainability report, an introductory fact sheet on corporate values and a brief history of the Group. 100 SUSTAINABILITY REPORT 2013

Ethics and compliance with laws and regulations are key values 3.1.7 Workplace health and safety15 for the Group. They can be found in all Company policies, from the Group Code of Ethics and the safety management rules to the YOOX is keen to preserve the physical and mental integrity of management of corporate data and the adoption by YOOX S.p.A. its Employees in full compliance with the law, with the Code of of the Organisational, Management and Control Model pursuant to Ethics and with its internal rules, which is why it prioritises a safe Legislative Decree 231/01. and comfortable working environment. By retaining an OHSAS Training on these aspects had been or was being provided to all 18001 certified safety management system, YOOX has been able Employees in 2013. Specifically, at the end of 2013 an e-learning to continually verify compliance with obligations and constant course was designed for the YOOXPEDIA platform on the issues improvement of system performance. arising from said Legislative Decree (the organisational model, There were only seven accidents across the Italian offices in an overview of the legislation and control procedures). The 2013, of which six occurred during commuting. Owing to the course will be rolled out fully to all Employees by the end of minor nature of the only accident that occurred on Company the first half of 2014. YOOX will also use this tool to provide premises, no corrective actions were deemed necessary for the subsequent training on issues arising from Legislative Decree 231 safety management system. There were no cases of occupational to specific groups of Employees, i.e. to update them on any major disease. organisational or legislative changes. In order to ensure a constant focus on Workplace Health and Safety, YOOX has drawn up training initiatives for the Hours of training by employment status various roles at the Company. A total of 4,022 training hours 2013 2012 were provided in 2013 (26% of which were via e-learning), a big Executives 1,054 211 increase on the 1,178 hours provided in the previous year. Of these training hours, around 54% were for office workers, Middle managers 1,996 626 24% for middle managers and around 8% for executives. Office workers 8,397 2,779 The remainder related to specific training activities. Total 11,447 3,616

NB: this does not include workplace health and safety training (4,022 hours in 2013 and 1,178 hours in 2012)

15 Information concerns YOOX S.p.A. excluding the Madrid and Paris offices. 3. people 101

Accidents OHSAS 18001:2007 certification Unit 2013 2012 2011 Accidents 7 10 10 YOOX S.p.A. obtained OHSAS 18001:2007 certification commuting no. 6 8 9 for its Italian offices in 2011, and passed the six-month at work 1 2 1 inspection in February 2012 without the third party (CERMET) reporting any instances of non-compliance. Absence caused by 81 108 271 accidents Internal inspections are carried out periodically on all areas commuting days 78 73 265 and departments affected by the applicable workplace health and safety legislation. at work 3 35 6 The main workplace health and safety risks are continually Frequency rate - 7.1 11.9 16.4 analysed and monitored to ensure better safety levels. Severity rate - 0.08 0.13 0.45 The main aims for 2013-14 are: Notes for calculation: • to reduce the number of injuries; Frequency rate: (total number of accidents / total number of hours worked) • to complete the training programme for workers, x 1,000,000 executives and middle managers in accordance with the Severity rate: (total number of days lost as a result of accidents / total number of hours worked) x 1,000 agreement between the state and the regions; • to improve training initiatives by using e-learning tools; Absence rate • to monitor compliance with safety conditions in contracted 2013 2012 2011 work and services; • to introduce software for managing deadlines for health Absence rate 1.76 5.61 6.98 and safety requirements. Notes for calculation: Absence rate: (days of absence / working days for whole workforce) x 200,000

Number of people receiving workplace health and safety training 2013 2012 2011 Employees 465 173 232

NB: this includes former employees who received training during the year 102 SUSTAINABILITY REPORT 2013

3.1.8 Industrial relations 3.1.9 Internal communication

YOOX encourages continual collaboration and dialogue with Throughout 2013, internal communication played a key role trade union organisations on the main topics pertaining to HR in sharing the Company’s strategic choices, results and events, management and business activities. as part of efforts to increase Employees’ participation, sense of There were no strikes or union protests in 2013. At present, there belonging and shared culture based on corporate values. are no Level 2 collective agreements in place. The main figures concerning industrial relations are shown below. YOOX has always encouraged Employee communication and interaction through its Intranet, the primary aim of which is to Employees who are union members (%) share Company objectives, communicate changes, disseminate 2013 2012 2011 knowledge, promote staff engagement and answer their questions. The Intranet contains a wide range of detailed Employees who are union members 2.5 2.5 3.13 information, from the Welcome Kit section (corporate mission NB: calculated in relation to employees based at offices in Italy and values, announcements, communication on organisational processes, handbooks, internal rules, etc.) to the section on the Participation in union activities (hours) main corporate procedures, as well as official presentations and 2013 2012 2011 news and press releases. In addition to this information, the Hours of absence for union meetings 21 17 26 Group’s Intranet has plenty of tools enabling better integration and authorised leave between the various departments and more efficient operations Hours of absence for national or 63 230 226 with regard to specific projects and activities. industry-wide strikes In order to efficiently improve productivity and collaboration, the Group uses an instant-messaging system with integrated functionalities for audio, video and web conferencing, voice calls and document sharing. Instant messaging encourages Employees to communicate and share information, and it also ensures constant dialogue between teams in different offices. 3. people 103

During 2013, weekly themed digital newsletters were released to inform Employees about, and encourage their participation in, Initiatives to celebrate our Employees various topics, such as: Your YOOX Anniversary • new ENJOYOOX benefits YOOX could not have achieved international success without • the Group’s financial results the constant commitment of all its people, who have worked • the main projects of the Group and of its online stores so hard and believed in the Company. This is why YOOX likes • awards won by YOOX to recognise its Employees, and in 2013 the “Your YOOX • stories from major international publications Anniversary” initiative was launched, congratulating staff • environmental sustainability initiatives on their employment anniversary with the Company and • internal competitions on Group social media presenting them with a personalised gift. • HR projects and initiatives (training, home-working, etc.)

Celebrating our Employees

YOOX Birthday – the annual Company event YOOXmas Tree Contest Each year, usually in June, YOOX Group Employees from across The YOOXmas Tree Contest, which was held for the fourth the globe take part in YOOX BIRTHDAY, which celebrates the time in 2013, provides another opportunity to encourage Company’s birthday and represents an important event for internal teamwork and stimulate creativity. Employees must design communication and teamwork. All Employees from YOOX’s offices and build the Company Christmas tree by following simple around the world feature in this much-anticipated event. rules, one of which is to create a group comprising members from different teams. Employees are invited to be creative, To celebrate YOOX’s 13th birthday in 2013, YOOX staged a original and imaginative as they design an innovative tree Federico Fellini-themed event, ‘Felliniesque’, in the centre of and put it somewhere within YOOX's offices. They are then Ravenna. Starting with a conference at the Dante Alighieri invited to take to social media to vote for their favourite tree. Theatre and then a party in the Giardini Pubblici park, YOOX took The winning team receives a ‘customised' gift, usually a group a trip back in time to 1950s Italy. activity such as a trip or a concert. More than 23 teams took part in the 2013 YOOXmas Tree Contest. 104 SUSTAINABILITY REPORT 2013 4. community 105

4. community 106 SUSTAINABILITY REPORT 2013 community

4.1 The Community, the Local Area and Government Authorities 4.1.1 YOOX and its relations Researching and promoting emerging domestic and with the Community international brands, offering support and visibility to new talent YOOX has always endeavoured to establish positive relations with Who's On Next? the local area by listening to and attempting to understand its In 2013, yoox.com continued to support young talent in the world various Stakeholders, while promoting constant and transparent of fashion by collaborating with Who’s on Next? and Who’s dialogue. on Next? Uomo, the two prestigious competitions run by Alta It is extremely important to YOOX to share its growth with the Roma and Pitti Uomo in partnership with Vogue and L’Uomo Vogue region and the Community in which it operates. - to promote the best of Made in Italy men’s, women’s fashion In 2013, the Company continued to adopt an approach based on and accessories. The winners in the women's section this year respect and probity in its dealings with the Community, supporting were Arthur Arbesser and Paula Andrew, while Casamadre and social initiatives and projects aimed at: Superduper Hats took first prize in the men’s category. • researching and promoting emerging domestic and international As a celebration of their talent, yoox.com invited the young brands, offering support and visibility to new talent; winners to create an exclusive product. The items and accessories • collaborating with NGOs and not-for-profit associations created by the winners of Who’s on Next? 2013 were sold on to organise events and initiatives with a view to funding yoox.com in over 100 countries to coincide with Milan Fashion humanitarian programmes and scientific initiatives; Week in September 2013. • supporting disadvantaged communities and victims of natural disasters, and promoting the local area and its artistic and Padiglione Crepaccio at yoox.com cultural heritage. Where do the artists who live and work in the city go during the Venice Biennale festival? Once every two years, when their city becomes the focal point for the world’s most important contemporary art, local artists seem to be lost in the shadows of leading international names. Together with Crepaccio – the Milanese shop window for emerging art – yoox.com went to Venice to provide global visibility for 10 talented youngsters through The poster of Padiglione Padiglione Crepaccio at yoox.com. Crepaccio at yoox.com 4. community 107

YOOX has always endeavoured to establish positive relations In 2013, YOOX continued to adopt an approach based on with the local area by listening to and attempting to respect and probity in its dealings with the community, understand its various Stakeholders, while promoting supporting social initiatives and projects constant and transparent dialogue

This new exhibition, curated by Caroline Corbetta, took the form of The show, which was open to everyone, gave all the guests at two complementary events: an exhibit in Venice during the three Fashion Week the chance to view and buy the designers’ creations Biennale preview days (29-31 May) and a virtual shop window in real time via a dedicated area of thecorner.com. The event was on yoox.com, giving people the exclusive opportunity to view and extremely successful and high profile thanks to the attendance of purchase the works on display throughout the festival (29 May - thousands of guests, including journalists, designers, celebrities and 24 November). The exhibit was held in the evocative Ca’ Soranzo fashion industry insiders from around the world. building, home to some of the artists, in order to enable visitors The initiative gave the designers the opportunity to display and sell to discover the art of these emerging young talents in an informal their collections online to a global audience, via the thecorner.com and authentic setting. All the works displayed at Ca’ Soranzo were shop window, as well as on the pages of Vogue Italia, during one available for sale on yoox.com, together with brand-new editorial of the biggest events of Milan Fashion Week. A new edition of the content and more information on the artists, bringing them to the annual project will also be presented in 2014. attention of millions of people worldwide.

THE VOGUE TALENTS CORNER thecorner.com also launches a number of initiatives each year dedicated to the discovery and promotion of emerging designers from around the world such as THE VOGUE TALENTS CORNER, in partnership with Vogue. Combining their respective expertise in e-commerce and publishing, thecorner.com and Vogue launch wide- ranging and innovative scouting projects to discover new talents. For the third time, thecorner.com and Vogue Italia presented The Vogue Talents Corner, selecting 11 emerging brands for which to provide publishing and commercial support as they grow and evolve. The following brands and designers were chosen: Aganovich (designed by Nana Aganovich and Brooke Taylor); Aquazzura (Edgardo Osorio); Daniele Carlotta; Fenton (Dana Lorenz); Heaven Tanudiredja; J. JS Lee (Jackie Lee); Kirsty Ward; Kzeniya (Kzeniya Oudenot); L’F Unisex (Licia Florio and Francio Ferrari); Palmer// Harding (Levi Palmer and Matthew Harding) and Vs2R The Vogue Talents Corner: the designers with Franca Sozzani (Editor-in-Chief of Vogue (Vincenzo Somarrelli). Italia) and Federico Marchetti (Founder & CEO of YOOX Group) 108 SUSTAINABILITY REPORT 2013

The Group is constantly committed to promoting and disseminating emerging domestic and international brands, offering support and visibility More than 50 projects to support emerging talent in recent years to new talent in the fashion industry

CFDA/VOGUE FASHION FUND Pomellato & Vogue for FIEO For the third time, thecorner.com was the online retail Partner The best way to start doing good is of the prestigious CFDA/Vogue Fashion Fund awarded by the by joining forces, and that is what Council of Fashion Designers of America and Vogue America Pomellato and Vogue have done to US designers. by creating a bracelet for FIEO, thecorner.com will enable the winning designers to sell their the European Institute of Oncology collections online. Foundation, to raise funds for cancer A new edition of the project will be presented in 2014. research grants for young scientists. The “Lock your love. Don’t lock your The charm bracelet of Pomellato ANDAM FASHION AWARD heart” project allows people to make & Vogue for FIEO As part of efforts to promote and support fashion industry talent, a firm gesture of support and solidarity by purchasing the silver thecorner.com was the online retail Partner for the second year bracelet with a padlock and charm for Euro 90 from any of the ANDAM Fashion Award, a prize for emerging designers Pomellato store, the pomellato.com website and also yoox.com working in France. The finalists, who all got the chance to sell their for Valentine’s Day. collections through thecorner.com, were: Ami, Iris van Herpen, The bracelet features the distinctive chain pattern of Pomellato, Masha Ma, Maison Rabih Kayrouz, Olympia Le-Tan, but in a brand-new textile version, available in three colours. Pedro Lourenço and Yang Li. thecorner.com will continue The rings on the chain represent solidarity, while the padlock this collaboration with ANDAM also in 2014. represents joining forces to achieve a common goal. Three special couples have given the bracelets their seal of approval: the stylist Collaborating with NGOs and not-for-profit Marta Ferri and her husband Carlo Borromeo, ballet dancers associations to organise events and initiatives with Roberto Bolle and Svetlana Zakharova, and model Eva Riccobono a view to funding humanitarian programmes and and her Partner, DJ Matteo Ceccarini. scientific initiatives “The couple is the first part of a chain of friendship, love, respect and care between human beings”, explain the duo behind the YOOX has endeavoured to support many social initiatives over project, Franca Sozzani, Editor-in-Chief of Vogue Italia and chair of the years through YOOX4LOVE. This permanent initiative brings FIEO, and Sergio Silvestris, creative director of Pomellato. The words together different creative industries to give rise to projects that “Fabulous, Immense, Exceptional, Outstanding”, spelling out the are consistent with corporate objectives and values and that initials FIEO, are engraved on the pendant. All revenue from sales combine ethics with aesthetics, taking into consideration important of the bracelet will go to the not-for-profit foundation that raises factors such as the social virtue and quality of the projects, the level funds to finance the research carried out by the European Institute of direct knowledge and the faith placed in Partner organisations, of Oncology, which was founded in 1994 by Professor Umberto in order to guarantee transparent and reliable actions. Veronesi to combat cancer through scientific research. 4. community 109

YOOX has endeavoured to support many social initiatives over the years through YOOX4LOVE. This permanent initiative brings together different creative industries to give rise to projects that are More than 20 consistent with corporate objectives and values NOT-FOR-PROFIT ORGANISATIONS SUPPORTED BY YOOX4LOVE IN RECENT YEARS and that combine ethics with aesthetics

Christmas at home with YOOX – exclusive aprons Supporting disadvantaged communities and victims of This is an exclusive capsule collection of unique aprons created natural disasters, and promoting the local area and in partnership with leading international names from the worlds its artistic and cultural heritage of fashion, art and design (Missoni Home, MSGM, Trussardi, Paola Navone, Dsquared2, Marc Quinn, Moschino, The Artists’ Colouring Book of ABCs Fondazione Achille Castiglioni, Aquilano Rimondi). There are 26 internationally renowned artists taking part in the Some of the sale proceeds will go to the Slow Food Foundation “The Artists’ Colouring Book of ABCs” project – one for each for Biodiversity, a not-for-profit organisation that promotes letter of the alphabet. The book, which is a hugely artistic retake environmentally sustainable farming in over 50 countries. of the traditional alphabet book, allows parents to admire works by leading contemporary artists while accompanying their children on an exciting journey of discovering the alphabet through art. For the first time ever, Alex Katz’s trees share a page with Harland Miller’s Dracula, Gary Hume’s i-shaped stick men lean against Pietro Ruffo’s fierce leopard, and Yinka Shonibare’s balloons prevent Marc Quinn’s Zombie Boy from reaching Keith Tyson's treasure island.

yoox.com also has 250 limited-edition sets online containing a hardback copy of the book and an exclusive silk-screen print signed by Jake and Dinos Chapman. The artists’ original works will go under the hammer at London's “Aprons”, exclusively for yoox.com Serpentine Gallery. The event will be organised in collaboration with yoox.com, and proceeds will go to the Kids Company Charity. 110 SUSTAINABILITY REPORT 2013

YOOX4LOVE over the years

Below is a description of some of the most successful projects of recent years:

THE SOCIAL RESPONSIBILITY HELPING VICTIMS OF NATURAL DISASTERS AND SUPPORTING AND PROMOTING THE REGION The World (and Wardrobe) of Margherita Maccapani Missoni Art at yoox.com and Francesco Vezzoli for FAI on yoox.com for OrphanAid Africa In support of the areas affected by the earthquake in the In November 2012, yoox.com presented its fourth initiative in Emilia-Romagna region, yoox.com teamed up with Francesco collaboration with OrphanAid Africa: a collection of over 70 vintage Vezzoli, one of Italy’s most internationally renowned contemporary items, including daywear, evening wear and accessories, selected from artists, to produce a limited-edition work that was sold exclusively the personal wardrobe of Margherita Maccapani Missoni. on yoox.com in December 2012. The entire proceeds of the sale All proceeds from the sale of the items will be donated to OrphanAid were donated to FAI (the Italian Environment Fund) to go Africa, a not-for-profit organisation that specialises in helping towards rebuilding the town hall of Finale Emilia, which was abandoned children from orphanages to settle in safe family damaged in the earthquake. This project, which was extended into environments, preventing the abandonment of children and protecting the opening months of 2013, is particularly important to YOOX, children’s rights in Africa. since it is keen to support and promote the artistic heritage of the

Emilia-Romagna region, where its headquarters are based. yoox.com, Naomi Campbell and Fashion for Relief in support of The piece, entitled CON AMORE, FRANCESCO VEZZOLI Care for Children celebrate the launch of yoox.cn (FRANCESCO BY FRANCESCO), is the first multiple-copy In November 2012, yoox.com, Naomi Campbell and Fashion for work that the artist has produced, issued in 399 editions, all Relief teamed up with some of the biggest names in fashion to create numbered and signed, which were sold exclusively on yoox.com a capsule collection of t-shirts inspired by China, with the proceeds for Euro 399 each. going to support the collaboration between Fashion for Relief and Care for Children. “WE LOVE JAPAN”- yoox.com and eight fashion brands Six t-shirts, six designers and one theme: China. Internationally together for Japan renowned brands and Chinese designers including 3.1 Phillip Lim, In April 2011, yoox.com joined forces with eight international Dolce & Gabbana, Masha Ma, Moschino, Qiu Hao and Fashion for fashion brands to lend support to Japan. Ann Demeulemeester, Relief joined forces to create six special t-shirts for sale exclusively Antonio Marras, Dsquared2, Kitsuné, Maison Martin Margiela, on yoox.com, with the proceeds going to Care for Children, Marni, Moschino and Y-3 used their talent and creativity to create an Asia-focused not-for-profit organisation that places abandoned some unique designs for the special “WE LOVE JAPAN” t-shirt children and orphans with local families, in close collaboration with collection sold exclusively on yoox.com, which sold out in just the Chinese government. Care for Children has found homes for over a few hours. All proceeds were donated to the International 200,000 children over the last 10 years. Federation of Red Cross and Red Crescent Societies to support those affected by the earthquake and tsunami in Japan. 4. community 111 YOOX applies the utmost integrity and probity in the management of its relations with government authorities, always complying with applicable legislation and regulations

4.1.2 Relations with organisations, The Group conducts its relationships with public officials institutions and industry associations in compliance with the applicable regulations and with the provisions of the Code of Ethics and of YOOX S.p.A.’s YOOX encourages dialogue with local authorities and industry Organisational, Management and Control Model pursuant to associations in order to strengthen institutional relations and Legislative Decree 231/2001, as well as on the basis of the support growth in the business and sector in which it operates. powers granted by the Board of Directors. The Company monitors changes to applicable legislation to ensure it remains fully compliant, and it is committed to smart management of relations with government authorities. YOOX pays particular attention to analysing topics related to fashion and e-commerce, including by participating in round tables, debates and events organised by the main industry associations to raise awareness around social and environmental issues.

Managing relations with government authorities Media relations

YOOX applies the utmost integrity and probity in the management Since 2000, YOOX has been featured in more than 45,000 of its relations with government authorities, always complying articles published in the most prestigious books, magazines with applicable legislation and regulations. In accordance with the and newspapers of all kinds from across the world. In 2013 Code of Ethics and with the law, YOOX’s relations with government alone, the YOOX Group was the subject of around 9,500 authorities are shaped by the utmost honesty, transparency and articles in the national and international media – an average probity. of 26 per day. Both in Italy and abroad, YOOX acknowledges and adheres to the From Bolivia to Kazakhstan, and from India to South Africa, values of democracy and political pluralism, and condemns any YOOX and its online stores and projects filled the pages of form of support or tolerance of terrorism in all its manifestations or hundreds of publications across all the continents. any form of subversion of the democratic order. 112 SUSTAINABILITY REPORT 2013

Relations with universities

YOOX remains committed to working with the world of academia. Specifically, relations have been strengthened with the University of Bologna (at its various faculties and locations), Bocconi University, SDA Bocconi and the University of Milan, but also with specialist fashion institutes, by way of meetings, presentations and case studies. In line with the Group’s international growth, it has also turned increasingly in recent years to the international market both for recruiting highly qualified people and for taking on recent graduates, fostering relations with some of the world's leading business schools.

One interesting employer branding initiative involves YOOX’s participation as a case study in the Italian CFA Research Challenge, an educational competition organised by finance professionals’ association the CFA Institute and by its Italian subsidiary, the Italian CFA Society. In 2013, the CFO and Investor Relations team of the Group met with the students to support the initiative and lend itself as a case study. The aim is to promote best practice among future financial Analysts and to give university students a close look at the sector in which they want to work. The team from the University of Milan were the winners this year. 4. community 113

Amber Valletta Master & Muse for YOOXYGEN

Supporto delle comunità più disagiate e delle vittime di calamità naturali; ed al sostegno e promozione del territorio e del patrimonio artistico e culturale

The Artists’ Colouring Book of ABCs

Ventisei, come le lettere dell’alfabeto anglosassone, sono gli artisti di fama internazionale che partecipano al progetto The Artists’ Colouring Book of ABCs. Il libro, una rivisitazione in chiave (molto) artistica del tradizionale abecedario, permette agli adulti di ammirare opere dei grandi artisti contemporanei mentre accompagnano i bambini in un viaggio emozionante alla scoperta dell’alfabeto attraverso l’arte. Per la prima volta nella storia, gli alberi di Alex Katz condividono le pagine con il Dracula di Harland Miller, gli omini a forma di “i” di Gary Hume si appoggiano sul feroce leopardo di Pietro Ruffo e i palloncini di Yinka Shonibare bloccano l’accesso allo Zombie Boy di Marc Quinn all’isola del tesoro di Keith Tyson. yoox.com propone un cofanetto speciale, in edizione limitata di duecentocinquanta pezzi, contenente una versione a copertina rigida del libro e una serigrafia esclusiva firmata da Jake & Dinos Chapman. Le opere originali degli artisti verranno battute all’asta alla Serpentine Gallery di Londra. L’evento sarà organizzato in collaborazione con yoox.com e i proventi saranno devoluti all’organizzazione Kids Company Charity.

credits: craig dean 114 SUSTAINABILITY REPORT 2013 5. planet 115

5. planet 116 SUSTAINABILITY REPORT 2013 planet

5.1 YOOX and the Environment

YOOX’s commitment to the Environment became concrete in 2009 impacts from transport and mobility, and a gradual increase in the with the launch of YOOXYGEN, the environmental sustainability use of renewable energy sources. programme that aims to raise awareness about respect for the All the Company’s environmental commitments aim to minimise environment among both its internal and external audience. environmental impact while spreading a culture of sustainability. The Company’s “YOOXYGEN eco-sustainable guidelines” handbook YOOXYGEN’s approach to environmental responsibility was aims to encourage sound environmental practice among defined internally by the development of a proper business culture its Employees. which, as well as monitoring emissions and environmental impact, facilitates gradual improvement of environmental performance. Looking after the Environment has a broad interpretation at Respect for and preservation of the environment take the form YOOX: it means promoting sustainable fashion as a concept to its of a series of specific measures aimed at: rational use of energy Customers and to other communities by implementing initiatives resources, lower energy consumption, fewer environmental that promote innovative, yet environmentally conscious, fashion.

To increase the adoption of renewable energy

To minimise the To incentivise the adoption of environmental impacts green mobility solutions of its corporate by its staff members activities YOOX’s commitments To improve energy to the Environment To offer its customers an efficiency in order eco-friendly range of fashion to reduce consumption and design products

To raise awareness among its To promote the staff members about using development of sustainable resources economically fashion projects (energy, water, paper, etc.) 5. planet 117

YOOXYGEN’s approach to environmental responsibility was defined internally by the development of a proper business culture which facilitates gradual improvement of environmental performance

In 2013, YOOX strengthened its commitment to a structured approach to managing environmental issues. On top of the BS UNI EN ISO 14001 certified Management System, OHSAS 18001:2007 Certification for Workplace Health and Safety, Energy Manager and Mobility Manager the Group’s Environmental Management System became In 2013, YOOX’s Environmental Management System UNI EN ISO 14001:2004 certified. became UNI EN ISO 14001:2004 certified. The introduction of the system enabled to streamline data YOOX approved its “Environment and Safety Policy", which collection and monitor the processes that generate significant systematically defines the Company’s approach to the Environment environmental impacts, such as waste, energy and mobility. and forms the basis of its “Integrated Environmental and A specific operating procedure was implemented for waste Workplace Health and Safety Management System”. The Policy management and collection, while the dedicated positions of identifies the environmental and safety requirements of internal Energy Manager and Mobility Manager were created and external Stakeholders, and represents the starting point for achieving measurable improvement. When it reviews the Policy each year, Management ensures genuine commitment on these issues by verifying that pre-established targets have been met YOOX is one of the top 3 Italian performers and setting new ones. In terms of rational energy use, YOOX in the CDPI (Climate Performance Leadership aims to obtain ISO 50001 certification for its Energy Management Index) according to the Carbon Disclosure System to continually improve its energy management through the Project 2013 monitoring of economic and quantitative indicators. YOOX Group is an Italian leader on climate change according to the CDP Italy 100 Climate Change Report 2013. The only e-commerce fashion company featured in the report, YOOX Group received the maximum score (A) for its commitment to reducing its impact on the environment, and therefore ranked among the top 3 Italian performers according to the "Climate Performance Leadership Index" (CPLI). Moreover, based on the quality and completeness of the information provided regarding environmental impact, YOOX Group achieved a score of 90/100 and received a special award as the “Best Improver”. 118 SUSTAINABILITY REPORT 2013

YOOX is committed to reconciling business growth with measures aimed at ensuring energy savings and efficiency

Plans to install a new 28 kWp photovoltaic facility at the 5.2 Energy management Zola Predosa offices in 2014 are further proof of the Group's commitment to renewable energy. The new installation will 5.2.1 Energy consumption and supplement the existing 6 kWp facility activated in 2011, which atmospheric emissions generates electricity for self-supply and domestic hot water.

The rational use of energy resources through In 2013, YOOX completed an energy audit on its energy consumption-monitoring solutions and instruments forms consumption methods, paving the way for a new structured system part of YOOX’s broader sustainable development model. for recording environmental performance and defining targets The Group’s energy consumption has risen as a result of gradual related to the environmental impact of its business activities. expansion, higher business volumes and the implementation Pursuing UNI EN ISO 14001:2004 environmental certification of new logistics technologies. YOOX is therefore committed is part of this process. to reconciling business growth with measures aimed Direct energy consumption relates to natural gas, which is the at ensuring energy savings and efficiency. For example, only energy source used to heat the offices. A comparison with the automated technology platform uses far less energy previous years is not possible since the recording perimeter than a traditional logistics structure with the same capacity. was extended in 2013 to include data from foreign offices. The tables below list data relating to the Group's direct YOOX is using more renewable electricity thanks to its green and indirect energy consuption and emissions. energy supply contract covered by CO-FER certificates. In 2013, around 49% of total consumption was represented by renewable energies. The Group intends to continue along this path until green energy represents the entirety of its consumption. 5. planet 119

YOOX Group’s Automated Order Storage and Retrieval System, at Interporto of Bologna

Credits: toby smith reportage by getty images 120 SUSTAINABILITY REPORT 2013 49% energy consumption from renewable sources

Direct energy consumption (m3) Total indirect emissions (t) Heat consumption 2013 2012 2011 2013 2012 2011

Natural gas 124,132 47,892 56,159 CO2 CO2 CO2 NB: the data for 2013 are estimated and refer to YOOX S.p.A. and to its Electricity purchased from third 1,808 1,483 1,246 Hong Kong, New York, Tokyo and Shanghai offices. The data for 2012 and 2011 parties are estimated and refer to YOOX S.p.A., excluding the Milan, Madrid and Paris offices NB: these data are estimated based on indirect energy consumption. A coefficient of 402 g CO2 /kWh was used to calculate CO2 emissions from electricity (the emission factor used was that which was published by Terna in the document “2010 international comparisons” – source: Enerdata) Indirect energy consumption (kWh) 2013 2012 2011 Electricity purchased of which: 4,496,759 3,688,301 3,100,000 5.2.2 Energy efficiency and reducing consumption from renewable sources 2,183,815 752,444 - from non-renewable sources 2,312,944 2,935,857 - YOOX has implemented several energy-saving initiatives. Some of NB: the data for 2013 are estimated and refer to YOOX S.p.A. and to its Hong these are based on promoting sensible practices, others on more Kong, New York, Tokyo and Shanghai offices. The data for 2012 and 2011 rational management methods, and others still on implementing are estimated and refer to YOOX S.p.A., excluding the Milan office innovative technical and practical solutions. Over the years to come, the Company intends to redouble its efforts in the Total direct emissions (t) knowledge that efficient energy management produces financial 2013 2012 2011 and environmental benefits.

Heat consumption CO2 CO2 CO2 Natural gas 261 101 118 NB: these data are estimated based on direct energy consumption. 3 A coefficient of 2.1 kg CO2 /m was used to calculate CO2 emissions from natural gas (Source: Carbon Trust) 5. planet 121

Energy efficiency and reducing consumption: main activities by area

Energy efficiency of buildings Transportation

Increasing the proportion of renewable energy used and Promoting the use of low-environmental-impact Employee implementing initiatives aimed at improving the energy mobility solutions and monitoring emissions from deliveries: efficiency of buildings: • Environmental policy • Renewable energy sources • Eco-compatible Employee mobility solutions • Energy audit • Monitoring the environmental impacts of product • Action taken on lighting systems, office windows and air transportation and deliveries conditioning units • Communication and promotion of environmentally friendly behaviour among staff through the “YOOXYGEN eco-sustainable guidelines” within the Company

Green IT

Implementing measures aimed at reducing the environmental impacts of the IT infrastructure used to support the Group's activities: • Energy efficiency of the Data Centres • Server virtualisation and PC power management • Recycling end-of-life equipment • Video conferences • Managed printing services

122 bilancio di sostenibilità 2013 80% of servers at the Zola Predosa site are already virtual

Energy efficiency at YOOX offices

The main energy efficiency initiatives undertaken at the operating sites are listed below:

ENERGY Audit Interventions involving facilities and structures This enables the Group to plan all its energy sustainability With regard to the restructuring and modernisation interventions activities, with the aim of identifying and prioritising the various carried out in 2013, the lighting systems in the new buildings measures. Following the audit, an Energy Usage Policy was drawn comply with visual-comfort legislation and energy efficiency and up. One priority is to centralise facilities and harmonise existing consumption standards. In 2013, YOOX also replaced the boiler at systems in order to produce benefits in terms of maintenance, Zola Predosa with a more energy efficient one. YOOX has installed reporting and reducing consumption. Among the other measures films on the office windows to filter out sunlight. identified are the Building Automation system, the thermal With regard to the climate control systems (cooling and air insulation of some structures, changes to lighting systems and conditioning), the company has chosen to use "Heat Pump" the replacement of boilers. systems that perform better while consuming far fewer non-renewable resources than traditional systems. Communication and participation YOOX has written the “YOOXYGEN eco-sustainable guidelines” handbook. This has been distributed throughout the Company and is available on the Intranet, and aims to educate Employees on the correct use of energy resources, paper consumption, waste and water management, and the environmental impact of transport. 5. planet 123

Green technology to save energy Centres (DPCs), during 2013 YOOX began a project to install an integrated free-cooling system that uses low-ambient-temperature Green Information Technology forms part of YOOX’s continual focus air to cool without the aid of refrigerators, thereby improving heat on researching and adopting environmentally sustainable solutions. transfer efficiency. This technology is particularly beneficial to By optimising technology investment, YOOX aims to cut operating DPCs during winter, since the operating temperature (22°C) can costs and protect the Environment by reducing consumption. With be maintained simply by using the already cool air from outside, regard to procurement policy, for example, low energy consumption thereby minimising energy consumption. is a major criterion for purchases of hardware and software. Server virtualisation Data Centre energy efficiency and PC power management

The management of the Data Centres is characterised by YOOX also optimises its energy resources by virtualising servers technological innovation and energy efficiency. and workstations. Virtualisation improves hardware capacity YOOX tries to invest in technologies that use blade systems, usage by consolidating underused servers, reducing cooling i.e. self-contained servers designed to use as little space as requirements and supply kWh, and considerably reducing possible. These hardware and software technologies reduce CO2 emissions. total costs (including for consumption) compared with traditional Around 80% of the servers at the Zola Predosa site are already Data Centre management solutions. YOOX’s operations are virtual. The percentage at the other two Data Centres in Milan supported by three Data Centres: one in Bologna - Zola Predosa, and Amsterdam is around 60%. The aim is to achieve 95% one in Milan and one in Amsterdam. virtualisation by the end of 2014, thereby optimising resource YOOX uses IT service providers that, as well as guaranteeing (space and electricity) consumption. business continuity, data security and protection and excellent connectivity, also offer environmentally friendly solutions. Some PC power management solutions are also being looked at. YOOX aims to use blade technology for all its servers by The aim is to work towards virtualising all workstations of the 2014-15, which would reduce the energy needed to cool its Bologna logistics centre warehouse, switching from the current machines, optimise space and result in better overall PCs to thin-client systems that reduce energy consumption and performance from the server rooms. operating costs. By the end of 2014, 150 of the 250 workstations With regard to precision climate control in the Data Processing at the Bologna logistics centre should be virtualised. 124 SUSTAINABILITY REPORT 2013

RACK AND POWER SAVING

ESTIMATED SAVING CURRENT SOLUTION PROPOSED SOLUTION 40 DL SERVERS -44% CONSUMPTION 4C7000S (26BL660S) -75% SPACE

POWER SAVING RACK SAVING

158 KW

25.8 40 14.53 RACK UNIT AS-IS TO-BE AS-IS TO-BE

Recycling of electronic equipment educational purposes. As well as extending the useful life no longer in use of electronic machines that are no longer of use to the Company, this means that YOOX is helping to respond to the needs In accordance with availability and where possible, YOOX of society. encourages the re-use of electronic equipment by way of The most recent donation of electronic equipment took place in donations to schools and not-for-profit organisations. Each piece October 2013, when YOOX supplied PCs from the IT laboratory to the of equipment is reset and reprogrammed so it can be used for “Istituto Carducci” school in Casalecchio di Reno (Bologna, Italy). 5. planet 125

YOOX Group’s Headquarters at Zola Predosa, Bologna

Credits: Carlo Furgeri 126 SUSTAINABILITY REPORT 2013

In order to foster an environmentally friendly business culture, YOOX has distributed its “YOOXYGEN eco-sustainable guidelines” handbook across the Company

5.3 Environmental policy ENERGY EFFICIENCY AND THE REDUCTION OF CONSUMPTION: MAIN ACTIVITIES BY AREA OF and sustainable conduct INTERVENTION

Small, day-to-day actions can also help to protect the Car Pooling Environment. In order to foster an environmentally friendly The car sharing programme incentivises employees to use a business culture, YOOX has distributed its “YOOXYGEN shared vehicle for business trips and commuting, thereby eco-sustainable guidelines” across the Company. reducing emissions and fuel consumption The suggested practices contained in the handbook relate to Hybrid company cars broad areas such as paper, water, energy, waste and transport. All the company cars are hybrid vehicles. Where possible, rail is the preferred method of transport between In 2013, YOOX focused particularly on identifying solutions the Group's different sites aimed at reducing journeys. YOOX’s environmental policy • 711,000 km travelled by company cars in 2013 promotes good sustainability practices with regard to Employee mobility, with a view to reducing fuel consumption and cutting Season tickets and remote working greenhouse gas emissions. The major sustainable-mobility The Group has an agreement with public transport operator initiatives are listed below. ATM under which employees can buy season tickets at reduced prices. The HR department has also launched a home-working programme

Company shuttle service Shuttle service running between the YOOX site at Zola Predosa and the Bologna train station at the beginning and end of the day. The number of journeys per day increased in 2013 • Shuttle service used by 75 people per day on average Videoconferences The use of remote information tools such as videoconferences and web meetings reduces employee travel, thereby helping to cut atmospheric emissions • 25 active video conference systems • over 10,000 hours of video conferences held in 2013 5. planet 127

The Mobility Management programme was launched to improve the quality of life 100% and the commutes of employees company cars are hybrid vehicles

5.3.1 Environmental impacts of mobility YOOX will focus its efforts on these areas in 2014, in an attempt to offer an alternative to driving in accordance with its YOOX also protects the Environment by working on the Employees’ needs. sustainable mobility of its people. 100% of Company cars are hybrid cars, meaning less Total direct emissions (t) fuel consumption and lower atmospheric emissions. YOOX is 2013 2012 2011 currently rolling out a system for recording the fuel consumption Driving (company cars) CO CO CO of Company cars so that YOOX can set targets for mobility 2 2 2 management. A new software for the fuel cards tied to each Petrol 99 72.43 56.49 vehicle showed that, in 2013, petrol consumption totalled more Diesel - 14.21 16 than 56 thousand litres and CO2 emissions reached 99 tonnes. TOTAL 99 72.43 70.7 The Mobility Management programme was launched to improve NB: emissions from driving (company cars) were calculated using the the quality of life and the commutes of our Employees. coefficients given by the manufacturers of the company cars based on YOOX carried out a commuting survey in the final quarter of 2013 the number of kilometres driven to record the mode of transport our Employees use to get to work, and the distance and duration of their journey. In 2013, YOOX Employees drove more than 314 thousand The results of the survey will be used to draw up the Commuting kilometres on business in their own personal vehicles (compared

Plan in 2014. with 302 thousand kilometres in 2012), producing 73 tonnes of CO2 Initial analysis of the results shows a lack of public transport equivalent17 (71 tonnes in 2012). infrastructure around the offices where most Employees drive to work.

16 This figure relates to the cars available at YOOX S.p.A.’s Italian offices. 17 These estimates are for YOOX S.p.A.’s Italian offices using the average emission factor of diesel and petrol pursuant to the “2012 Guidelines to Defra / DECC’s GHG Conversion Factors for Company Reporting”. 128 SUSTAINABILITY REPORT 2013

With regard to rail journeys for business purposes, emissions rose More than 1.2 million kilometres were driven by Partner couriers in 18 from 14 tonnes of CO2 equivalent in 2012 to 26 tonnes in 2013 , 2013 for product recalls, emitting around 328 tonnes of CO2. partly because of a larger reporting base. In 2013, YOOX also recorded for the first time the distance covered In order to monitor all environmental impacts of business travel, moving products between warehouses at the main logistics hub YOOX undertook to gradually extend its reporting base to also at the Bologna logistics centre. This totalled approximately 66,000 include emissions from air travel. In 2013, flights taken by YOOX km, corresponding to 17 tonnes of CO2.

Employees resulted in emissions of 781 tonnes of CO2 equivalent. EMISSIONS FROM THE TRANSPORTATION OF GOODS BY METHOD OF TRANSPORT

YOOX is aware of the importance of monitoring the environmental AIR TRANSPORT impact of its deliveries to end Customers, which constitute the 7.7% ROAD TRANSPORT main source of the Group's indirect atmospheric emissions. 0.2% RAIL TRANSPORT This is why it has worked with its courier companies to set up specific initiatives to record and offset logistics and transport OTHER 18.4% emissions. In 2013, thanks to our agreement with United Parcel Services (UPS) – the logistics Partner responsible for most of the Group’s 73.3% national and international deliveries – it was possible for the first time to record total atmospheric emissions from deliveries in EMEA (Europe, Middle East, Africa), NAM (North America) and Asia. These amounted to approximately 8,450 tonnes of CO2 equivalent19. Indirect transport-related emissions include the environmental impact of recalling products from stores, sales points and warehouses throughout Italy and Europe. YOOX uses a third party with a fleet of predominantly Euro 4 and Euro 5 vehicles.

18 International rail (Eurostar) issue factor pursuant to “2012 Guidelines to Defra / DECC’s GHG Conversion Factors for Company Reporting”. 19 Total emissions were calculated directly by UPS and recorded in the “UPS Carbon Impact Analysis” report. This figure relates to emissions generated by deliveries for YOOX, including Scope 1 (direct UPS emissions), Scope 2 (indirect emissions associated with purchased electricity used at UPS premises) and Scope 3 (emissions associated with downstream distribution and transportation activities). The greenhouse gas calculation method was established by UPS and has been independently verified by Société Générale de Surveillance (SGS). In addition, The CarbonNeutral Company has certified that the calculation method is consistent with “The CarbonNeutral Protocol”. 5. planet 129

The Group ensures that the paper used at all its operational sites does not contribute to deforestation. For internal consumption and in-house materials, YOOX exclusively uses paper produced using cellulose from FSC certified forests

5.4 Management and use The Ecobox for deliveries of resources The YOOX Group uses recyclable materials for packaging, and since 2009 they have been RESY certified. As part of an ongoing 5.4.1 Purchasing and environmental sustainability drive, yoox.com, thecorner.com, consumption of paper shoescribe.com and the online stores deliver worldwide using “Ecobox” packaging, which is RESY, FSC, PEFC and SFI certified The main raw materials consumed by YOOX are the paper and internationally. cardboard used to package its goods for delivery. The Group ensures that the paper used at all operational sites Consumption of paper and cardboard (kg) does not contribute to deforestation. To that end, for internal consumption and in-house materials, it exclusively uses paper 2013 2012 produced using cellulose from certified forests (FSC), which A4 paper 6,795 7,151 means that they are managed responsibly in accordance with strict A3 paper 140 83 environmental, social and economic standards. Cardboard for deliveries 853,093 701,746 Total 860,028 708,980 “Ecobox”, the packaging system developed in 2009, is testament to the Company’s awareness of the environmental impact of using NB: - These data on paper consumption are estimated and refer to YOOX S.p.A., cardboard for deliveries. excluding the Madrid and Paris offices - The data relating to cardboard for deliveries were estimated based on the Awareness-raising initiatives for Employees helped to reduce number of boxes used for deliveries (including, where applicable, shopping bags and delivery notes) to customers of multi-brand online stores paper consumption by around 4% year on year in 2013. Further yoox.com, shoescribe.com and thecorner.com and of the mono-brand stores initiatives will be implemented in 2014 to reduce consumption (excluding the Marni and Diesel stores), as well as for deliveries to peripheral even further. warehouses (in the US, Japan and Hong Kong). Cardboard consumption relating to Kering deliveries was also included in 2013. The 2012 data on cardboard for deliveries were adjusted after the data collection methods used were improved - SOf the total A4 and A3 paper consumed in 2013, 80% was FSC certified, while 20% was PEFC certified. 18% of the paper consumed bore the Eco-label symbol 130 SUSTAINABILITY REPORT 2013 -18% of the total volume of waste produced in the last three years

5.4.2 Water consumption The Company has also launched a periodic programme promoting the reuse of electronic equipment for educational purposes. Most of the Group’s water comes from the mains supply. Most of The main types of waste produced in the last three years are the water consumed is for hygiene and sanitation purposes or for recorded. There has been a reduction of around 18% in the total operational needs. The Company is committed to promoting sound volume of waste produced. The reduction in plastics is due in part practice with a view to preventing waste and gradually reducing to less plastic packaging being used for incoming products. All water consumption. Over the last two years, water consumption waste has been duly sent for recovery. levels have risen considerably as a result of the automated warehouse construction works at the Bologna logistics centre. Type of waste (kg) 2013 2012 2011 Consumption of water (m³) Paper and paper/cardboard 190,669 236,120 228,770 2013 2012 packaging Water for ordinary consumption 10,239 2,486 Plastic 360 4,170 27,660 NB: these data are estimated and refer to YOOX S.p.A., excluding the Milan, Electronic devices 900 418 - Madrid and Paris offices. The 2013 data also include consumption in Japan Batteries and accumulators 260 - - and Spain (between August and December) Wooden packaging 91,570 66,290 60,620 Other 228,340 320,440 241,930 5.4.3 WASTE Total waste produced 512,099 627,438 558,980 YOOX is committed to proper waste management and disposal NB: in full compliance with the law, as well as to encouraging its - These data refer to waste from the Italian offices of YOOX S.p.A. for which private waste disposal providers are used. They do not include waste that is Employees to adopt sensible collection and recycling practices. managed through municipally owned utility companies Collection of waste separated into the categories mentioned - The waste produced is classified under European Waste Catalogue code R13 in the table below takes place at the Milan and Bologna offices on (storage of waste pending any of the operations numbered R1 to R12), with the exception of out-of-use devices containing CFCs, HCFCs or HFCs included a daily basis, with a view to reducing the volume of waste sent to under “Other”, which are classified under code R12 landfill and facilitating waste recovery. The paper bins throughout - In 2013, “Electronic devices” included 490 kg of hazardous waste. In 2013, the Company’s premises are equipped with a padlock and a slot for “Other” referred mainly to packaging made of mixed materials, whereas for 2012 and 2011 it referred to both packaging made of mixed materials and the proper disposal of individual sheets of paper, with the aim of building materials generated by the restructuring of the Bologna recycling the paper and preserving data confidentiality. logistics centre - The increase of the “wooden packaging” category is associated to an increase of fast-moving volumes at the Bologna logistic centre 5. planet 131

At the heart of the YOOXYGEN initiative is “Eco-mmerce”, More than 100 a dedicated online space on yoox.com promoting sustainable brands online eco-sustainable fashion and design at YOOXYGEN on yoox.com

5.5 YOOXYGEN and Partnership with Green Cross International eco-mmerce: the environmental YOOXYGEN is an active Partner of a number of not-for-profit responsibility drive organisations and institutions that focus on environmental issues, including Green Cross Eco-mmerce: sustainable fashion International (GCI), UNEP (the United Nations and design with YOOXYGEN Environment Programme) and Estethica, a sustainable-fashion initiative promoted by YOOXYGEN, which is YOOX’s environmental sustainability the British Fashion Council. programme aimed at raising environmental awareness among Since its launch in 2009, YOOXYGEN has been a supporter the Group’s millions of users worldwide, creates initiatives of GCI, an NGO founded by former Soviet leader Mikhail and projects through partnerships with international organisations Gorbachev that promotes and finances environmental - and and talented artists and designers. humanitarian-support initiatives in 31 countries around the world. At the heart of the YOOXYGEN initiative is “Eco-mmerce”, a dedicated space on yoox.com promoting eco-sustainable fashion SMART WATER FOR GREEN SCHOOLS and design through a selection of eco-friendly fashion, design and jewellery, as well as special features and exclusive video content. YOOXYGEN supports the Green Cross International The YOOXYGEN range is classified using the eco-criteria defined programme to supply drinking water and education on by Eco Fashion World, based on the most significant characteristic sanitation and the Environment to children and their local of each item (Ethically produced, Fair Trade, Organic, Craft-Artisan, communities. Smart Water for Green Schools provides Custom, Recycled, Vegan). concrete solutions for people affected by drought in disadvantaged regions and countries. These solutions On yoox.com, YOOXYGEN is also a global shop window for the include: installing rainwater collection systems and various designers who create exclusive limited-edition collections. sanitation services in schools; developing basic-hygiene and healthcare educational programmes; and building Most interest in the online YOOXYGEN selection, which wells for the whole community. showcased 1,120 stock-keeping units (SKUs) in 2013 representing more than 100 brands from across the world, has come from the USA, Italy, Germany, Russia, France and Japan. 132 SUSTAINABILITY REPORT 2013 YOOXYGEN aims to promote and raise awareness around sustainable fashion through a series of special projects launched over the years

YOOXYGEN’s special projects IOU Project for YOOXYGEN - The eco-sustainable IOU Project capsule collection exclusively for YOOXYGEN YOOXYGEN aims to promote and raise awareness around From cloth espadrilles to madras shirts, to jeans treated using green sustainable fashion through a series of special projects launched processes: for him and for her, the IOU Project capsule collection, over the years. These projects are one of YOOXYGEN’s distinctive produced exclusively for YOOXYGEN, reinterprets iconic clothing in features and are testament to the Company’s commitment to typical casual, relaxed styles. Making the collection really special attempting to raise awareness about socially responsible conduct is its multicultural soul: the I Owe You Project clothes, designed within both its specific sector and the fashion industry in general. in Madrid, are packaged with fabrics created by hand in India by The main projects launched in 2013 are described below. a group of local artisans using traditional, ancient methods and in accordance with ethical working practices. The fabrics then end up Master & Muse by Amber Valletta in Italian, Portuguese and Spanish couture houses, where they are In 2013 YOOXYGEN has presented Master & Muse, the new cut and stitched. eco-sustainable project of Amber Valletta. Master & Muse aims Each item of clothing is given a code, almost like its own identity to offer a selection of clothing and accessories that combine document, which also allows the end Customer to trace the ethics, fashion and global accessibility. As a YOOXYGEN exclusive, materials and the manufacturing process. Master & Muse offers users a range of eco-sustainable items selected personally by Amber Valletta from among fashion brands Generation Pacifique & Le Dictateur the world over. This is a collection of clothing and accessories On Earth Day 2013, yoox.com renewed its passion for the where style meets sustainability, ethics become elegant and eco-friendly lifestyle through a special collaboration between responsibility is refined. Generation Pacifique, a green Costa Rican brand, and Le Dictateur, a publisher and exhibition space. Estethica Generation Pacifique produced two t-shirts exclusively for Since 2010, YOOXYGEN has been the retail Partner of Estethica, YOOXYGEN for this project, created entirely from bamboo fabric an initiative founded by the British Fashion Council to support and solvent-free ink, and therefore 100% eco-sustainable young, emerging UK fashion designers who have chosen to and biodegradable. work with handmade, upcycled or recycled products and whose The drawings on the t-shirts were designed by Pierpaolo Ferrari production techniques save energy. and Matteo Nuti who pay tribute to artist Maurizio Cattelan’s installation, exhibited in his retrospective ‘All’ at the Guggenheim Museum of New York in 2011. The artist, hailed as an irreverent provocateur and a bold prankster, interprets the contradictions of today’s society: authority, identity and the ephemeral essence of nature. 5. planet 133

YOOXYGEN over the years certain brands from Master & Muse by Amber Valletta Eco-Age by Livia Firth • Pachacuti – UK/Ecuador: certified fair-trade handmade hats Livia Firth, the creative director of eco-age.com, chooses the best • Vivienne Westwood Ethical Fashion – UK/Kenya: handbags from the worlds of fashion and 'green' lifestyle exclusively for and accessories made from recovered materials and yoox.com. Leading designers and niche brands come together certified by The Ethical Fashion Initiative, a programme of to create an extraordinary eco-collection. The elegant, essential, the International Trade Centre, which is part of the United innovative and versatile collection, picked exclusively for yoox.com Nations and the World Trade Organisation by Livia Firth, combines ethics with glamour. • The North Circular – UK: handmade accessories made from wool obtained through cruelty-free shearing. Vivienne Westwood for the Ethical Fashion Africa project with the International Trade Centre and YOOXYGEN In 2011, YOOXYGEN supported the Ethical Fashion Africa Project launched by Vivienne Westwood in partnership with the International Trade Centre (ITC), a joint agency of the United Nations (UN) and the World Trade Organisation (WTO). The Ethical Fashion Africa capsule collection of handbags and accessories, designed by Vivienne Westwood and available exclusively online at yoox.com, was 100% handmade by local artisans in Kenya as part of a programme run by the ITC to support the work of marginalised women in African communities, enabling them to become part of the global economy. The ITC thus promotes the growth of sustainable businesses that do not create dependency on international aid, instead generating organic growth within local communities. yoox.com held a dedicated event in partnership with Pitti Immagine in June 2011 to showcase the project. 134 SUSTAINABILITY REPORT 2013 Annexes 136 SUSTAINABILITY REPORT 2013 SUSTAINABILITY REPORT 2013 137 index of gri indicators 138 SUSTAINABILITY REPORT 2013

INDICATOR TYPE Description of indicator Coverage Page/Direct remark PROFILE 1. Strategy and analysis 1.1 Core Statement from the Chairman and the Chief Executive Officer Total 11 1.2 Core Key impacts, risks, and opportunities Total 32-33, 39, 116-117; Annual Report 2013 (page 77) 2. Organisational profile 2.1 Core Name of the organisation Total 12-13 2.2 Core Primary brands, products and/or services Total 22-27 2.3 Core Operational structure Total 26-27 2.4 Core Location of the organisation’s headquarters Total 26-27 2.5 Core Countries where the organisation operates Total 26-27 2.6 Core Nature of ownership and legal form Total Annual Report 2013 (page 14) 2.7 Core Markets served Total 26-29, 52 2.8 Core Scale of the reporting organisation Total 8-9, 22-27, 46, 73 2.9 Core Significant changes Total 12-13; Annual Report 2013 (page 87-88) 2.10 Core Awards received Total 60-61, 79, 117 3. Report parameters Report PROFILE 3.1 Core Reporting period Total 12-13 3.2 Core Date of publication of previous report Total The 2013 Sustainability Report is the third edition 3.3 Core Reporting cycle Total 12

3.4 Core Contacts and addresses for questions on the report Total 148 Objective and scope of the report 3.5 Core Process for defining report content Total 12-13, 33-34 3.6 Core Scope of the report Total 12-13

3.7 Core Limitations on the scope of the report Total 12-13

3.8 Core Information about affiliated companies Total 12-13, Annual Report 2013 (page 102) 3.9 Core Data measurement techniques and bases of calculation Total 12-13 3.10 Core Restatements of information of previous reports Total 12-13 3.11 Core Significant changes from previous reports Total 12-13 3.12 Core GRI Index Total 137-143 3.13 Core External assurance Total 146-147 SUSTAINABILITY REPORT 2013 139

4. Governance, Commitments, Engagement 4.1 Core Governance structure Total 36-38; Annual Report 2013 (page 17-21, 30) 4.2 Core Indicate whether the Chairman is also an executive officer Total 37-38; Annual Report 2013 (page 26-28)

4.3 Core Independent and non-executive Directors Total 38; Annual Report 2013 (page 20)

4.4 Core Mechanisms for Shareholders and Employees Total 73, 102; Annual Report 2013 (page 47-48) to provide recommendations 4.5 Core Linkage between compensation for Directors and top Total 94-96; Annual Report 2013 (page 30-32) management and performance 4.6 Core Conflicts of interest Total 39-40; Annual Report 2013 (page 41-43) 4.7 Core Qualifications of Directors Total The CVs of each Director can be found in the “Corporate Governance” section of the company website www.yooxgroup.com; Annual Report 2013 (page 17-20) 4.8 Core Mission, values, codes of conduct and principles Total 30-31, 50 4.9 Core Procedures to identify and manage economic, Total In order to monitor socio-environmental performance environmental and social performance annually, the Sustainability Report is presented to the Board of Directors 4.10 Core Process for evaluating the Board’s performance Total Annual Report 2013 (page 25) 4.11 Core Method for applying the precautionary Total 100-101, 116-117; Annual Report 2013 (page 34-41) principle approach 4.12 Core Adoption of external economic, social and environmental Total 72 codes and principles 4.13 Core Memberships in associations Total 72

4.14 Core List of stakeholders engaged by the organisation Total 35 4.15 Core Basis for identification of stakeholders with Total 35 whom to engage 4.16 Core Approaches to stakeholder engagement Total 53, 62-63, 70, 127 4.17 Core Key topics and concerns raised through stakeholder Total 12-13, 53, 62-63, 70, 127 engagement and actions taken ECONOMIC PERFORMANCE DMA EC Disclosure on management approach Total 15-16, 46-48; Annual Report 2013 (page 55-60) EC1 Core Economic value directly generated and distributed Total 48-49 EC2 Core Risks and opportunities due to climate change Total 15-16, 116-117 EC3 Core Coverage of benefit plan obligations Total Annual Report 2013 (page 142) EC4 Core Substantial financing received from Total Grants and public financing obtained the public administration related exclusively to the distribution of staff training 140 SUSTAINABILITY REPORT 2013

EC6 Core Policy, practices and proportion of spending on Total 71 locally based Suppliers EC7 Core Procedures for local hiring Total The Company does not consider geographic location to be a key factor when hiring EC8 Core Development of investments provided for public benefit Total 49; At present there are no significant investments in infrastructure or public utility services. For a description of projects for the public benefit please refer to the “Community” chapter ENVIRONMENTAL PERFORMANCE DMA EN Disclosure on management approach Total 15-16, 116-117 EN1 Core Raw materials used Total 129 EN2 Core Materials reused or recycled Total 129 EN3 Core Direct energy consumption by source Total 118-120 EN4 Core Indirect energy consumption by source Total 118-120, 127-128 EN8 Core Water withdrawal by source Total 130 EN9 Additional Water sources significantly affected Total 130 by withdrawal of water EN11 Core Land in protected areas or areas with high biodiversity Total The Company does not own or does not expect to own operating premises, leased or managed, that are located close to or in protected areas, or areas with high biodiversity outside of protected areas

EN12 Core Description of significant impacts on biodiversity Total With regard to YOOX’s activities, no significant impacts on biodiversity were recorded

EN16 Core Direct greenhouse gas emissions by weight Total 118-120 EN17 Core Indirect greenhouse gas emissions Total 118-120, 127-128 EN18 Additional Initiatives to reduce greenhouse gas emissions Partial 121-127 EN19 Core Emissions of ozone-depleting substances Total Air conditioning and cooling systems in the Italian offices contain coolants that could damage the ozone layer and contribute to the greenhouse effect if emitted into the atmosphere. In 2013 no gas leaks were recorded EN20 Core Other air emissions Total With regard to YOOX’s activities, no significant emissions were recorded EN21 Core Effluents discharge Total Waste water is similar to that of households and therefore is released into the sewers EN22 Core Waste production and disposal methods Total 130 EN23 Core Total number and volume of polluting spills Total No cases of spills were reported. At the YOOX S.p.A. Interporto headquarters there is a specific procedure in place to manage spills

EN26 Core Iniziative per mitigare gli impatti di prodotti e servizi Totale 129, 131-133 sull’ambiente SUSTAINABILITY REPORT 2013 141

EN26 Core Initiatives to mitigate environmental impacts of products Total 129, 131-133 and services

EN27 Core Percentage of products sold and packaging materials Total 129 reused or recycled

EN28 Core Fines for non-compliance with environmental laws and Total There were no fines or penalties for non-compliance with regulations environmental laws and regulations

EN29 Additional Significant environmental impacts of transporting products Total 126-128 and other goods and materials used for the organisation’s operations, and transporting members of the workforce SOCIAL PERFORMANCE DMA LA Disclosure on management approach Total 15-16, 86

LA1 Core Breakdown of workforce by employment type, Total 87-88 contract and region LA2 Core Turnover by age group, gender and region Total 87-91 LA4 Core Collective bargaining agreements coverage Total The collective bargaining contract for the sector covers all Employees in the Italian offices except for managers, who are covered by the collective contract for managers LA5 Core Minimum notice period for operational changes Total In the event of significant operational changes, the Group respects the minimum notice period required by current regulations in the countries where it works LA7 Core Injuries and occupational diseases Total 100-101

LA8 Core Training programmes concerning prevention and risk Total 100 control to assist Employees regarding serious disorders or illnesses

LA10 Core Employee training Total 97-100 LA11 Additional Programmes for skills management and lifelong learning Partial 97-100 for Employees

LA12 Additional Percentage of Employees receiving regular performance Total 94-96 and career development reviews LA13 Core Breakdown of Employees by gender and other indicators Total 87-88, 92-93; of diversity (e.g. disability) By entering into formal agreements with the relevant government authorities, YOOX is gradually adjusting to legal provisions relating to the employment of persons belonging to protected categories; this information will be reported starting from the Sustainability Report 2015

LA14 Core Ratio of the base salary of male Employees to female Total 94-97 Employees in the same category 142 SUSTAINABILITY REPORT 2013

HUMAN RIGHTS DMA HR Disclosure on management approach Total 15-16, 70-71, 86 HR1 Core Transactions that have undergone human rights screening Total No investment agreements were undertaken during the year that resulted in the acquisition of other entities. With regard to relations with Suppliers and Partners please refer to the indicated page HR2 Core Suppliers and contractors who have undergone human Total At present there are no processes in place to assess and rights screening monitor performance regarding human rights along the supply chain. In order to launch dialogue on sustainability issues a shared path has been agreed with online store Partners

HR4 Core Discrimination accidents and actions undertaken Total No incidents of discriminatory practice were recorded in 2013

HR5 Core Activities in the course of which freedom of association Total Based on YOOX’s activities and its geographical presence, and the right to collective bargaining might no activities were identified in which freedom be exposed to risks of association and the right to collective bargaining could be exposed to significant risks

HR6 Core Operations involving a high risk of the use of child labor Total Based on the YOOX’s activities and its geographical presence, no operations were identified involving a high risk of the use of child labour

HR7 Core Operations involving a high risk of the use of forced labor Total Based on the YOOX’s activities and its geographical presence, no operations were identified involving a high risk of the use of forced labour IMPACTS ON SOCIETY DMA SO Disclosure on management approach Total 15-16, 106, 111

SO1 Core Management of impacts on the community Total Considering the activities carried out, no programmes were introduced to assess and manage impacts of activities on the local community

SO2 Core Monitoring the risk of corruption Total 39-42 SO3 Core Employees trained in preventing corruption crimes Total 42, 100 SO4 Core Actions taken in response to cases of corruption Total No cases of corruption were reported in 2013 SO5 Core Positions on public policy and lobbying Total 111-112

SO6 Additional Total value of financial and in-kind contributions to politi- Partial Code of Conduct (page 14) cal parties, politicians, and related institutions by country

SO8 Core Fines and non-cash penalties for failure to comply with Total In 2013 the Group received no significant penalties for laws and regulations non-compliance with laws or regulations SUSTAINABILITY REPORT 2013 143

PRODUCT RESPONSIBILITY DMA PR Disclosure on management approach Total 15-16, 63-64, 70-72 PR1 Core Health and safety assessment on products and services Total YOOX products belong to the “Storage, distribution life cycle stages and supply” phase of the life cycle. With regard to quality control on incoming products please refer to the section “Focus on product quality and sustainability” PR3 Core Information requested for the procedures and services Total During quality control, items without the “Made in” label, subject to such disclosure requirements with missing/illegible parts or without a label at all are taken out of production PR5 Additional Practices related to customer satisfaction Partial 62-63 PR6 Core Programmes to comply with laws and voluntary codes on Total At present the company has not signed voluntary codes marketing activities or standards on marketing activities PR8 Additional Complaints regarding breaches of privacy Total In 2013 the Group did not receive complaints regarding breaches of privacy or loss of information PR9 Core Fines for non-compliance with laws and regulations Total In 2013 the Group did not receive significant penalties for non-compliance with laws or regulations on the supply and use of products or services 144 SUSTAINABILITY REPORT 2013 SUSTAINABILITY REPORT 2013 145

External Auditors’ Report on the Sustainability Report 146 SUSTAINABILITY REPORT 2013 SUSTAINABILITY REPORT 2013 147 more Information Alba D’Amico Silvia Scagnelli Head of Corporate & Internal Communications Investor Relations & Financial Communications Director T +39 02 83112811 T +39 02 83112811 [email protected] [email protected]

Riccardo Greghi Head of CSR & Internal Audit T +39 051 6105211 [email protected]

The Sustainability Report can be consulted at the website www.yooxgroup.com Printed on FSC Mix certified paper.

Typesetting and print: SERVIF RR Donnelley Creative concept: New! S.r.l.