Mytheresa Delivers Strong Results In Q1 2023; Leans Into Its Top Clients

Mytheresa delivered impressive metrics or the first quarter of 2023, with 20.8% growth in gross merchandise value to 197.9 million Euros compared to 163.9 million Euros in the prior year period, and an adjusted EBITDA margin of 6.6%. The digital retailer confirmed full year 2023 guidance for gross merchandise value growth of 16% to 22% with a stable adjusted EBITDA margin of 9% to 9.5%. And, while consumers with different sized pocketbooks are feeling pinched by higher gas prices and inflation, Mytheresa is focused on its top clients, a group whose fortunes remain largely unperturbed.

Michael Kliger, CEO of Mytheresa said the company is committed to these clients, and to giving them extraordinary service and experiences. “Just last week, we launched a Christian Louboutin pet line, we had a Renowa luggage exclusive for a while and we pushed further into China,” Kliger told me.

Mytheresa announced a Chinese designer program. “We’ll launch exclusive collections for select Chinese designers,” Kliger said. “The product will be ready by next spring. We’ll celebrate the launch with a dual event in Paris and Shanghai. It’s really to show other parts of the world that there’s also good luxury design in China.”

There’s demand in China and the U.S., where the country continues to deliver above average GMV growth of 28% in the quarter versus the first quarter of 2022. “We’ll continue to push our presence in the market and expand our local team, and continue to have events there,” Kliger said. “Just last week, I was in New York and we had a celebration with Oscar de la Renta.”

Gross profit margin in the first quarter of 2023 increased to 49.9% compared to 49% in the 2022 first quarter. Mytheresa continued to focus on full-price business and increasing share of CPM – its Curated Platform Model – which generates 100% gross profit with no cost of sales. Seven brands are now live compared to one brand in last year’s first quarter.

Net Sales increase of 18.1 million Euros, or 11.4% year-over-year to 175.9 million Euros, due to the planned transition of brands to the CPM, and the subsequent effect of recording the platform fee as net sales.

“Our business has shown strengths in difficult economic times,” Kliger said. “We believe Mytherea is a truly differentiated business with a unique customer focus, outstanding business model and operational excellence.”

In the three months ended September 30, 2022, Mytheresa saw a 27.7% increase in the number of high quality clients, which is what the company calls its top-spending customers. There was a 6.5 percent increase in average spend among all customers compared to the first quarter of 2022, however, the company’s occasional consumers pulled back. There was a 13.4% increase in active customers, reaching 800,000 consumers.

Mytheresa is also building out its product categories. The company introduced a lifestyle segment and Kliger said, “We’re working on category expansions for next year. We are looking obviously at categories like art, jewelry and watches, everything that is foremost luxury. Now that we’ve started this lifestyle [segment] we will see how far it can go. At the moment, we have chairs and side tables. It’s always what the customer allows us to do.”

Mytheresa stays close to top clients by hosting events such as the Oscar de la Renta meet-up. Forty clients were invited for a chance to meet Laura Kim and Fernando Garcia, the co-designers of the brand. “We have an event next week with Balmain and Olivier Rousteing in Paris,” Kliger said. “The final event will be for Pucci in St. Moritz with creative director Camille [Miceli]. We stand out so much compared with other platforms, that we get the creative directors themselves, and that’s a dream come true for our clients.”

One key aspect, which is why Mytheresa customers buy online, is lack of time, Kliger said. Mytheresa solves the time deficit problem and is a convenience for clients. Personal shoppers make it easy for clients by getting to know them and knowing what they want.

“When they meet, we organize a lunch or go to a party, but in the end this type of consumer looks most for efficiency,” Kliger said. “We have some customers who never come to events. They say, ‘I don’t have time, but I love the personal shopper. Send me a Whatsapp message. That works for me. There’s a lot of messaging, instant messaging or in Europe, Whatsapp.

“Our customers are mostly people where the wealth was created in this generation,” Kliger continued. “It’s not inherited wealth. We don’t serve the wives of rich husbands, we serve rich women. And they don’t have time to go to boutiques. That’s not who they are. And therefore, our personal shoppers are 24 hours, seven days a week. That’s the expectation. They may have a question at 10 o’clock at night.”

“Hardly anyone says they have more time than 10 years ago,” Kliger added. “Everyone thinks they have less time. They feel they have less time today than before, so time is very precious. To top customers time is more precious. Time is the currency for these customers.”

The luxury sector is a success story in resilience. Twenty or 30 years ago, there was a question of whether luxury would survive because it was very much mired in the context of the red carpet and charity galas, Kliger said. “Today, luxury is beach wear, active wear, and casual wear, so luxury has embraced a much broader lifestyle. It allows the younger generation, which says, ‘I don’t need a tuxedo but I enjoy wearing nice clothes’ [to participate.] Luxury opened it up and didn’t remain in an antiquated lifestyle.”

Opening a brick and mortar store isn’t on Kliger’s to-do list. “I have a high respect of what can go wrong,” he said, adding that he says ‘yes’ to pop-up shops. “A pop-up is great because part of our business is understanding our customers’ mood and state of mind,” he added. “Is she thinking of work, is she thinking of vacation. Pop-ups are ideal because there’s a perfect moment for a pop-up in Aspen, and there’s a perfect moment for a pop-up in Miami Beach and there’s a perfect moment for a pop-up in St. Barths.

“Pop-ups are much more flexible,” Kliger said. “We’ve done pop-ups in Miami an the Hamptons. It gives us a physical presence, a physical touchpoint, but it’s not a permanent operation. In a funny way, the first quarter earnings has confirmed much of what we’ve been saying, that luxury is much more insulated, it’s a different customer. And luxury is global. In these tough times, we’ve seen growth in all three major continents, Europe, U.S. and China/Asia.”