Wayfair Inc. (W - Free Report) has introduced a flagship brand — Hykkon — in an effort to strengthen home furnishing offerings in Europe. Notably, the brand offers a wide range of home decors, textiles, lighting and furniture.
Notably, the company is offering over 700 products for the living room, dining room and bedroom, which are available in retro-inspired color palette, via the brand.
Additionally, the brand offers personal designs at affordable prices, which in turn will enhance customer experience.
Notably, Hykkon marks the first of its kind for the company’s European business, and is a testament to the company’s efforts to strengthen presence in the region. Currently, the brand is available in the U.K. and Germany via Wayfair.co.uk and Wayfair.de, respectively.
We believe the flagship brand combined with the company’s robust delivery system is likely to aid it in gaining traction across shoppers. This in turn is anticipated to drive Wayfair’s top line in these countries.
U.K. & Germany Home Furnishing Space Holds Promise
The latest move is expected to expand Wayfair’s footprint in the U.K. and Germany’s home furnishing markets, which present immense prospects.
Per a report from Statista, the furniture and homeware market in the U.K. is expected to generate $7.7 billion in 2019. The figure is expected to reach around $10 billion by 2023 at a CAGR of 6.6% beginning from the current year. Notably, online sales are anticipated to make up 11% of the total revenues in this market by 2023.
Further, according to a report from Mordor Intelligence, the U.K. home decor market is expected to see a CAGR of 5.5% over a period of 2019 and 2024.
Meanwhile, furniture and homeware market in Germany is also expected to generate revenues of $7.4 billion in 2019, according to Statista report. Additionally, this figure is likely to reach $9.9 billion by 2023 at a CAGR of 7.7% over a period of 2019 and 2023.
Further, online sales are expected to account for 16% of total revenues in this market by 2023.
Notably, Wayfair is well poised to capitalize on these market opportunities on the back of Hykkon.
Move to Drive International Revenues
The launch of Hykkon in the U.K. and Germany is in sync with Wayfair’s continued focus toward strengthening international footprint.
Notably, the company operates in three international countries – Canada, the U.K. and Germany. Its international segment is witnessing robust growth courtesy of strategies like building international infrastructure, expanding international supplier network and establishing brand presence.
Moreover, Wayfair remains optimistic about growth prospects in the U.K. and Germany. Its initiatives to expand house-brand offerings in these countries remain major positives.
Hence, we believe Hykkon is likely to aid the acceleration of the company’s international revenue growth.
Zacks Rank & Stocks to Consider
Currently, Wayfair carries a Zacks Ranks #3 (Hold).
Some better-ranked stocks in the broader technology sector are Alteryx (AYX - Free Report) , Synopsys (SNPS - Free Report) and Garmin (GRMN - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Alteryx, Synopsys and Garmin is currently pegged at 17.62%, 12% and 7.35%, respectively.
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