Wayfair exits German market after 15 years; company cites weak market conditions, low brand awareness and limited scale as key factors

This morning, Wayfair CEO and Co-founder Niraj Shah shared the note below with the Wayfair team:

Hi Everyone,

As we begin the new year, I want to share an update regarding our business. After careful consideration, we made the difficult decision to exit the German market, effective today. I regret that this decision impacts our employees in Germany. This is not a decision made lightly, and we recognize the profound impact it has on our team members and their families.

Germany has been an important part of our journey for the past 15 years, serving as one of our original entry markets into Europe, alongside the UK. During this time, we built a solid base of customers, developed supplier partnerships to provide the selection and value in the home category that defines our brand, and built a strong European infrastructure. Over the years our success in the UK outpaced our success in Germany, as we were able to develop a household brand in the UK, and grow our market share there, all while developing strong unit economics. Our Germany efforts lagged behind, but we set out to close that gap over the last year.

Since Covid, and in particular over the past year, we have made meaningful progress in Germany, thanks to the work of many of you directly involved in the market. However, despite these efforts, scaling our market share and improving our unit economics in the German market has proven challenging due to factors such as the weak macroeconomic conditions for our category in Germany, the lower maturity of our offering, our current brand awareness, and our limited scale. In our recent assessment, we concluded that achieving market-leading growth in Germany still remained a long and costly endeavor, and one that is increasingly lagging the potential return we see in other areas. To ensure we align our resources with initiatives that can deliver the greatest impact, we made the difficult but necessary decision to reallocate efforts to areas with strong long-term potential where our current efforts are showing great progress.

We are offering a comprehensive support package which includes severance, and access to our employee assistance program. Impacted employees will receive individualized information with more details.

While this is difficult news to share, we have much to look forward to in 2025. We will continue to focus on operations and investments in our international markets—Canada, the UK, and Ireland, where we have meaningful market share and which we believe hold significant potential to replicate the success we’ve achieved in the U.S. Globally, our core initiatives include expanding our physical retail footprint, optimizing our marketing reach, growing our loyalty program, Wayfair Rewards, and developing our Wayfair Verified program. Additionally, we will continue to invest in technology improvements to create seamless, innovative experiences and deliver on our brand promise of making it easy to create a home that is just right for you.

To our colleagues leaving: Thank you for your dedication and contributions to our company. We have learned so much from you and are grateful for the positive impact you’ve made. And to all of you who have worked very hard over numerous years on the Wayfair Germany business, I am sorry that despite all of our efforts we were not able to successfully develop Wayfair.de into the German market winner.

Thank you all for your understanding, support, and your faith and belief in the long-term potential of Wayfair.

Niraj

Forward Looking Statements
Caution concerning forward-looking statements: This letter contains forward-looking statements within the meaning of federal and state securities laws. All statements other than statements of historical fact contained in this letter —including statements regarding our investment plans and anticipated returns on those investments, our future customer growth, our future results of operations and financial position, business strategy and plans, profitability goals and the financial impact and expected savings of our restructuring plan, as well as when we expect any such charges, costs or savings will occur — are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these terms or other similar expressions. You are cautioned not to rely on these forward-looking statements, which are based on current expectations of future events. For important information about the risks and uncertainties that could cause actual results to vary materially from the assumptions, expectations, and projections expressed in any forward-looking statements, please review the most recently filed Wayfair Reports on Forms 10-K and 10-Q. Wayfair does not undertake to update any forward-looking statement as a result of new information or future events or developments.