The luxury multi-brand digital platform, which has been profitable since day one, is attracting US consumers and new shoppers, after its New York listing in January. The business says it plans to launch an e-concession model with major brands.
By guest author Kati Chitrakorn from Vogue Business.
Mytheresa, the luxury multi-brand digital platform that listed this year, said growth in the US and demand from top luxury clients at physical events has driven a 36 % rise in annual sales.
MYT Netherlands, the parent company of Mytheresa Group, said sales rose to EUR 612.1 million for the full fiscal year ended June 30 2021. Sales climbed 60.5 % over the same year period in 2019. Adjusted EBITDA rose 55.2 % to EUR 54.9 million. The shares fell 8 % in New York trading in the hour after its earnings call on expectations of faster growth.
Mytheresa, one of the few profitable digital luxury platforms, is driving growth with its strategy combining a wider array of products with strong brand partnerships, bringing exclusives and pre-launch capsules to drive excitement. (Farfetch reported sales climbed 43 % in its most recent quarter ended June 30, while Mytheresa rose 36 % in the same period.) This year, the business, which expanded its active customer base by 38 % to 671000, launched resale for top customers with a Vestiaire Collective partnership; ramped up physical events to appeal to its top spenders; and is planning a new curated platform model with major brands (inventory is held by the brand but orders are fulfilled by Mytheresa, which takes a fee). Demand in the US increased revenues by 133 % in the final quarter of the year versus a year earlier.
Mytheresa’s growth and consistent profitability was driven by the change in consumer behaviour to online and “a superior business model compared to many of our competitors,” says Mytheresa CEO Michael Kliger. He points to Bain & Co’s estimates that 30 % of personal luxury goods spend will take place online. “We believe that this trend [of online shopping] will continue but it will probably be at a slower pace in the post-pandemic world.”
It was “an extraordinarily successful year”, says Mytheresa’s chief financial officer Dr Martin Beer, adding that he is “very confident on sustaining the overall strong profitability levels”.
Analysts are bullish. “Luxury spending remains robust. It’s fuelled by a stock market performance that has been solid and reopening trends in retail. Luxury is going online and Mytheresa stands out because of its elite great product content, high-touch serve and proprietary marketing, given that their business is European-centric but has exposure to the US and Asia,” says Oliver Chen, managing director of retail and luxury at financial services firm Cowen.
A “spiced up” marketing approach
Mytheresa’s online marketing costs have decreased over the past five years, as the result of better customer targeting through AI-supported algorithms, Kliger tells Vogue Business. “We are making sure we attract customers that bring a high lifetime value. We’re really focusing on long-term wardrobe builders, and not on those who buy a single piece of hot luxury item.” Their purchases are driven by their lifestyle, rather than a specific product, he says.