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Mytheresa Growth Slows, Profits Narrow Amid Challenges For E-Tailers

CEO Michael Kliger said the company would increase its focus on cultivating a top-end clientele as demand from aspirational consumers softens.
An image from Mytheresa's 2022 Festive Campaign.
Mytheresa's 2022 festive campaign. (Mytheresa)

Growth at Mytheresa slowed significantly last quarter, as aspirational customers feeling the pinch from inflation pulled back on spending during the holidays, CEO Michael Kliger said.

Sales in China — a growth market where the company has been investing heavily — also contracted, as a sudden reversal of the government’s strict zero-Covid policy sent coronavirus infections surging, he said.

Mytheresa said the value of goods sold (GMV) on its platform rose 7.8 percent year-on-year to €216 million ($229 million) in the three months through December 21, 2021, a slowdown from 21 percent growth the previous quarter. Revenues rose just 1.3 percent year-on-year to €190 million, the Munich-based luxury e-tailer said.Profit for the quarter fell, with adjusted EBITDA falling 37 percent to €17.7 million.

”We clearly feel that aspirational customer is under pressure,” Kliger told BoF. Shares fell 12 percent in early trading.

The results come as players across the luxury e-commerce sector face mounting pressures, including fierce competition, the return of in-person shopping, and rising interest rates that have made investment capital more expensive. Rival Farfetch reported a rare drop in sales in November, sending shares plummeting, while earlier this month, Canadian e-tailer Ssense laid off roughly 7 percent of its workforce. Others, like Yoox Net-a-Porter and Matchesfashion, are grappling with widening losses amid ongoing turnaround efforts.

Mytheresa has worked to differentiate itself from rivals by putting a greater emphasis on growing profitably. The company says its able to maintain higher margins than rivals by nurturing relationships with a more targetted pool of wealthy fashion lovers. Still, shares in the company have fallen about 30 percent over the past 12 months, mirroring a broader sell-off in e-commerce.

Despite slowing growth, the company confirmed guidance for the fiscal year, albeit at the lower end of forecasts.

Doubling down on growing its cohort of loyal, high-income customers will remain a priority, Kliger told BoF. He sees bright spots in the economic outlook for high-net-worth individuals, and plans to tap demand by continuing to stage money-can’t-buy experiences — like a recent dinner co-hosted with Tod’s chairman Diego Della Valle at his home in Italy — and bolstering its assortment of high-ticket items.

“In terms of interest rates, in terms of stock market, in terms of commodity prices, the outlook has dramatically improved since October-November,” he said.

This past quarter, the e-tailer added labels like fine jewellery brand Pomellato and luxury electronics maker Bang & Olufsen to its offer.

“We have always focused on the high end customer, but we will probably now do even more so,” he said.

Learn more:

Mytheresa Bolsters China Push With Local Designer Programme

The German e-tailer is launching a ‘China Designer Program’ as part of its plans to grow its still-nascent business in the key market.

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