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In Online Luxury, Mytheresa Offers a Shred of Optimism

Mytheresa may not be leaps above its luxury peers, but its sales and profit growth are still modest. The company is betting that appealing to top spending clients will keep it from suffering the same fate as its competitors.
A model poses in a Mytheresa campaign.
Mytheresa is the rare online luxury retailer not on the brink of collapse. But it still has its own growth struggles to contend with. (Mytheresa)

This week, Mytheresa delivered something rare in the increasingly dreary online luxury sector: good news.

As competitors near collapse, on Thursday, the Munich-based e-tailer announced it grew overall sales 8.3 percent to €197 million ($212 million) year-over-year during the second quarter of its fiscal 2023, which ended in December. US sales were a particular bright spot, growing 18 percent. That growth was driven by the company’s focus on courting high-spending customers with enviable experiences, such as bringing clients to a private rehearsal of the New York City Ballet. The number of US shoppers in that cohort jumped 48 percent in the company’s second quarter.

Mytheresa has also benefited from its peers’ woes, Michael Kliger, the company’s chief executive told The Business of Fashion. For most of 2023, companies like Net-a-Porter, Matches and Farfetch saw double digit drops in US sales.

“In the US landscape, we do have a bit of a tailwind in terms of the competitive landscape for customers that really want to shop luxury, that want to go to a platform that focuses on that,” Kliger said.

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Still, its own fortunes aren’t completely stable. In the second quarter, Mytheresa’s overall gross merchandise volume — a measure of goods sold on the platform — grew 6 percent from the previous year on a constant currency basis to €219 million ($235 million), a marginal decline from the 8 percent year-over-year growth it reported in the previous quarter. That’s due in part to slower spending among aspirational shoppers, a group that accounts for the majority of Mytheresa’s sales.

The company’s profits have also fluctuated in recent quarters. Mytheresa’s earnings before interest, taxes, depreciation and amortisation reached €8 million in the second quarter. That may have been an improvement from the €800,000 EBITDA loss it reported in the previous quarter — which came as Mytheresa succumbed to hyper-discounting pressures to fend off competition — but it still represented a 55 percent year-over-year drop.

Meanwhile, growth in Europe and Asia remains sluggish as China struggles to bounce back from the pandemic and geopolitical tensions in the Middle East and Ukraine impact consumer spending in Europe.

The company is banking on its events strategy to boost growth among top-spending customers in those regions. In March, it will invite select clients in China to preview a new collection from a yet-to-be-announced Western brand and talk to the creative director, Kliger said. Mytheresa will also host a retreat in Italy with a luxury brand in May.

Kliger said the company is confident these tactics will help it defend its position as one of the few luxury e-tailers consistently reporting sales growth. The company expects GMV to jump as much as 13 percent for the fiscal year that ends in June. Its stock closed up 20 percent following its earnings release.

“We feel vindicated, we feel that the strategy we have adopted pays off and therefore [we’ll] push even harder on luxury, on exclusivity, [and] brand activations,” Kliger said.

Further Reading

For Luxury E-Commerce, It’s Even Worse Than It Looks

US consumer spending across online luxury sellers like Farfetch, Matches and Net-a-Porter suffered sustained declines throughout 2023. The question is whether the downturn is simply temporary or the luxury e-commerce model itself is broken.

Why Online Luxury Is Broken

Reports of financial strain at Farfetch amid a stalled deal with YNAP has driven confidence in multi-brand e-commerce to all-time lows. With value propositions eroding and investment drying up, a way forward remains unclear.

About the author
Malique Morris
Malique Morris

Malique Morris is Direct-to-Consumer Correspondent at The Business of Fashion. He is based in New York and covers digital-native brands and shifts in the online shopping industry.

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