“Turning hyper growth into a profitable model was no easy task”
Not every CFO experiences how their finance role at a startup evolves as the company gets bigger and bigger. From building their department from scratch to managing hypergrowth to dealing with M&A and IPOs, the experience could be as much exhausting as it is rewarding.
Today we talk with Josep Barberá about his experiences and challenges at Privalia, where he works as their Chief Financial Officer. Created in 2006, Privalia is one of the biggest online-fashion outlets in Europe offering daily sales of products from top brands.
Having been at Privalia for almost 8 years, what has been your main focus?
Since I joined Privalia in 2009, I’ve been focused on Finance functions that everybody typically thinks of like Reporting, Compliance, Administration, Treasury. This probably has been the easiest part, although it wasn’t exactly “easy.” The real difficult part has been growing the company in a complex environment, being adaptable to each situation and looking forward to the future rather than the past. To give you a number, after eight years in Privalia and following the acquisition of Venté Privé, we are managing a business that’s 14 times bigger than when I joined.
What was you last role before joining Privalia?
My previous employer was Tradebe. I was in Barcelona in the corporate services department, helping the CFO for one year and a half. Then I got promoted to CFO of the UK market, where I had a tough experience doing M&A, implementing SAP, building up a team almost from scratch and dealing with cash restrictions during the crisis period -which can be really hard when you are a bit new to the function. I do value a lot that experience in the UK as it helped me to measure the size of problems and I am sure that this experience contributed positively to my work in Privalia.
What were your principal challenges there?
I had plenty of challenges in Privalia that I never thought I could face before. I would distinguish them in different stages. The first period is our hyper growth, in which, among other things, we set up new Countries (Brazil and Mexico) and opened new businesses lines.
The second stage consisted of going up again and trying to turn such hyper growth and a loss-making business into a profitable model and becoming a very low-cost-focused company.
In the last year, we have been very focused on VP integration. It is a challenging and fascinating project since each organisation has different platforms, working methodologies and policies. However, we do share common values that make it easier to move all of us in the same direction.
Finally, having the right people and team is key to successfully driving all of this. We need to devote time to the team since people are one of the most valuable assets of the company.
It looks pretty intense for only eight years…
Well, if at the time I joined Privalia you had asked me my expectations, I would have told you something much different than what actually ended up happening. So again, the biggest challenge is to be both flexible enough and prepared for the unknown. Not everybody is that lucky to have the opportunity to see all this in such a short period, so in this sense, I feel very lucky. Obviously, all of these adventures wouldn’t have been possible if we didn’t have a great team to get us there.
How do you see the fashion/e-commerce landscape?
We are definitely moving towards an increasingly crowded market. All big players such as Amazon, Alibaba, eBay , etc. are focusing their efforts on building a fashion division. Also, Zalando has a discount website that is probably the biggest e-commerce fashion player in Europe. These companies aside, most brands want to launch a website or using Marketplaces to sell products (with or without discounts). However, smaller labels will find difficulties in achieving this at the scale that we are doing it.
In order to face such competition, we push hard to have the best product offering at very attractive discounts. We are improving the delivery service as this is a focus for most e-commerce retailers. Additionally, we are investing in technology to provide real-time data relevant data to our customers, as well as to give us business intelligence.
How is being a CFO in Privalia compared to other industries?
Privalia not only is an e-commerce company but is also a retailer. So probably my work is more similar to a CFO in a retail or consumer goods company. Where I do see a difference is the massive amount of information I manage compared to my previous jobs and focusing on what is important is not always an easy task. To manage it all we need to find the right balance.
In Privalia, I need to understand what our competitors are doing, the latest social trends and having enough knowledge in other areas of the company. I sometimes need to be responsible for tasks handled outside of my domain they go wrong. Therefore, I need to be as connected as possible with all different areas within the company.
Following your last point, what role does data analytics play in your department?
One of the areas I manage within the finance department is revenue assurance and fraud prevention, so I am in charge of all online payment methods fraud prevention. Obviously, when you have millions of customers buying in different countries, you cannot use an Excel spreadsheet and analyse what happened three weeks ago. The business intelligence team is helping to build up a dashboard based on a data platform that will allow us to track conversion rates by payment method, costs, performance, and the fraud levels per user and campaign, amongst other KPI’s.
Business complexity gets bigger and bigger as time goes by. Therefore, we need to be supported by technology and real-time data.
How important are forecasts in your department?
They are critical. Every month we use them to plan or estimate the next two months (or longer), and every quarter we revise our forecasts for the future. We have constantly been doing business plans in the past.
Beyond that, in our attempt to go public, I think that at the time we were not prepared enough regarding the ability to meet targets. Fortunately, in the last four years, we met our expected budgets, even if they were challenging. A good prediction of the future is very valuable to have in order to take decisions in advance and mitigate any unforeseen problem.
Is it hard to achieve a work-life balance acting as CFO?
In the past, it was harder to find such balance, and I have to thank my wife since she has been very patient with me. However, you need to be committed to deal with stressful moments if you want the rewards that come with these kinds of roles in high-growth companies. But again, such ‘crazy’ moments lasts for specific periods, and you need to know when is time to push or just work hard. Good balance is key.
The good thing is that although the challenges become more complex as you get bigger, you usually have a better team to plan and prepare projects, which helps to find such balance.
Still, we live in a 100%-connected world where the smartphone, Skype, email and WhatsApp make it easier to work from different places. This is great for working from anywhere, but when I am with my family, I try to make sure that the phone is away and we have quality moments together. However, I acknowledge it is not an easy thing. Maybe, one day, our holidays will be in a hotel without wifi or any outside connectivity.
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