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Mytheresa Doesn’t Rule Out Going Private as Sales Grow

Mytheresa on Wednesday reported another quarter of standout growth in an otherwise dreary luxury e-commerce sector.

The Munich-based luxury e-tailer’s net sales jumped 18 percent to €234 million ($253 million) in its fiscal third quarter that ended in March. It expects net sales for the year to grow as much as 13 percent to €869 million. As well, its adjusted earnings before interest, taxes, depreciation and amortisation nearly tripled to €9 million, driven by a reduced reliance on discounting thanks to lower inventory levels.

Mytheresa’s steady rise in sales has been attributed to the retailer’s ability to differentiate its offering from competitors. In the third quarter, it released exclusive capsule collections with Gucci, Bottega Veneta, Loewe and Brunello Cucinelli. The company also focuses on wooing its top spending clients with special events — a recent example is a 24-hour event with Paris-based label Courrèges in Shanghai for top clients that included a brand exhibition, a meeting with the brand’s creative director Nicolas Di Felice and a private dinner.

But all eyes are on Mytheresa for more than its consistent growth. In April, the Financial Times reported that the company is among the suitors looking to acquire Yoox-Net-a-Porter, which continues to rack up losses for its parent company Richemont. Mytheresa also reportedly hired a separate banker to consider going private, according to a recent report in Women’s Wear Daily, which could be part of its acquisition strategy. Consolidation has already swept the sector: Farfetch was sold to South Korean retail giant Coupang in December, and Matches was bought by Frasers Group and subsequently put into administration in March.

“As we feel the company is undervalued, it’s clearly the task of management, and also supervisory board, to find ways to create the value that is in the business,” chief executive Michael Kliger told The Business of Fashion. “That there is speculation about going private is not totally unreasonable. That’s what companies sometimes do in these situations.”

Kliger added that he “cannot confirm at all the rumors out there.”

While Mytheresa has fared better than many of its rivals, investors have been slow to reward the company. Mytheresa’s share price has risen about 50 percent this year, but is down more than 80 percent since its January 2021 initial public offering. The stock fell as much as 6 percent on Wednesday.

“We still need to clearly tell the story of a differently positioned business model that is creating profit,” Kliger said. “While the numbers again show that there is no question about it, we still haven’t got all the attention of the investors.”

There are other challenges ahead. The company’s focus on top clients, who typically spend more with each purchase, helped drive customer acquisition costs down 2.8 percent as well as a 10 percent decrease in overall marketing expenses in its fiscal third quarter. But in an April note, TD Cowen analysts said Mytheresa won’t be immune to the rising costs to acquire customers online for long as luxury brands invest more in their direct-to-consumer channels and potentially target the high-net-worth customers that Mytheresa banks on.

With that, Mytheresa is exercising caution. The e-tailer expects its adjusted EBITDA profit margins to only grow by as much as 5 percent for its fiscal year that ends in June.

“The approach Mytheresa has followed works better than most: stand out as a go-to destination on the back of original curation and high service levels, as well as a focus on serving high lifetime value customers, with no ambition to become a ‘winner takes all,’ but rather a profitable niche player,” said Luca Solca, Bernstein’s head of luxury goods research, in an email.

Editor’s Note: This article was updated on 15 May 2024. An earlier version misstated that the company’s event in Shanghai was three days. It was a 24-hour event.

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