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.

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