While e-commerce, multi-brand fashion marketplaces Farfetch and Matches have fallen and Richemont-owned YOOX Net-a-Porter hangs in the balance, Mytheresa stands strong. It’s done it by offering a carefully curated selection of luxury fashion offerings focused on the demands of true luxury consumers using a traditional wholesale-to-retail business model like a department store.
Its point of difference from other multi-brand fashion e-commerce marketplaces is how it’s transformed the transactional nature of online retail with personal shoppers who also engage with their highest potential clients to host in-person events. It’s the evolution of the classic Tupperware or Mary Kay sales model for the digitally-powered 21st-century luxury consumer market.
Solid Growth In Challenged Market
Mytheresa’s influence-the-influencer strategy propelled the company to 15% growth in gross merchandise value (GMV) in 2023 to $932 million (€856 million), and it matched that double-digit growth rate in the most recent third quarter 2024 to reach $275 million (€252 million).
At its current pace. Mytheresa should easily achieve its ~$1 billion year-end guidance. And with adjusted EBITDA margin of 3.9% – $10 million in third quarter – it’s 3% to 5% guidance on EBITDA margin for fiscal 2024 is in reach too.
The Mytheresa business model has created a virtuous circle that makes it the premier e-commerce partner for luxury brands. It hosted recent collaborations with Brunello Cucinelli, Loewe, Givenchy, Saint Laurent, Gucci Ancora, Bottega Veneta, Khaite and Courrèges. It boasts Bottega Veneta, Burberry, Dolce & Gabbana, Loro Piana, Moncler, Prada and Valentino among its long-term partners.
Acknowledging that the luxury market is still facing a challenging macro environment, CEO Michael Kliger said in the most recent earnings call:
“We see ourselves as a clear winner in the consolidating luxury e-commerce space. We are extremely well positioned to benefit from the tremendous growth prospects when market conditions improve globally and to capitalize on these prospects.” He added, “We are actively evaluating opportunities to support and accelerate our investment in future business growth.”
U.S. Leads In Growth
Mytheresa was founded as a luxury fashion boutique in Munich in 1987 by Susanne and Christoph Botschen, who transitioned to the e-commerce space in 2006 with a German and English website, being an online luxury pioneer after recognizing its ability to reach beyond the physical boutique’s geographical confines – it now serves customers in over 130 markets.
Yet its European homeland accounted for nearly 60% of Mytheresa net revenues last year. The U.S. had less that 20% revenue share.
By comparison, Bain reckons American consumers accounted for roughly 30% of the nearly $400 billion (€363 billion) personal luxury goods market in 2023, compared with about 22% for European consumers.
Mytheresa aims to bring its U.S. market penetration at least up to industry levels, if not exceed them. During the third quarter, U.S. GMV advanced 42% and its GMV share in the U.S. reached 22%. It also reported nearly 50% growth in top customers stateside, those highest-potential customers who are pivotal to the company’s business model.
Overall the company added 17% top customers to its rolls and experienced 8% growth in last-twelve-month average order value.
Heading up U.S. operations is president Heather Kaminetsky who joined the company in 2021. With a degree in information systems, she has an impeccable luxury digital marketing track record, including three years spent as vice president global marketing at Net-a-Porter and nearly six years at Barneys, advancing from director internet marketing to vice president marketing.
“When I started at Mytheresa, I used to compare it to Barneys,” she explained. “We aren’t heavy on the emerging designer segment just like Barneys. We serve the discerning customer that at Barneys would enter the doors looking for the most exclusive second, third and fourth floor on the women’s side. Our customers’ expectations are at that level.”
Mytheresa’s Secret Sauce
Kaminetsky took me behind the scenes to understand Mytheresa’s secret sauce and how it will be used to entice more top U.S. luxury customers. Her immediate challenge is to grow brand awareness.
“We see tremendous growth in America, but people here don’t really know Mytheresa yet,” she said. Here’s the game plan to grow share in the U.S. market:
Traffic-Stopping Popup Shops
Mytheresa planted its physical feet in the U.S. last year by opening its first popup shop in the Hamptons with LA’s Flamingo Estate, specializing in treats for the home and garden. Curious shoppers came in and said it was the first time they’d heard of Mytheresa and others wondered if it was a legitimate business. Such worries were put to rest.
The Hampton’s store was set up in a renovated auto body repair shop; talk about the curiosity factor. Fashions were displayed hanging from car lifts and in-store personal shoppers facilitated online fashion shopping with QR codes, while Flamingo Estates offered a selection of pantry and other take-home goodies.
The partnership’s success in the Hamptons was followed by a gingerbread-themed holiday shop in Los Angeles. Gingerbread cookies with QR codes made for fun and tasty fashion shopping. Plans are in place for another run in the Hamptons this summer.
“Our game is connecting with people emotionally and then building those relations,” she added. “We will continue to be very targeted in penetrating different markets in the U.S. to gain brand awareness and traction; no massive billboards or things like that.”
Personal Shoppers Make The Connection
MALIBU, CALIFORNIA – AUGUST 03: Co-Host & President of Mytheresa for North America Heather … [+]
Beyond popup stores, Mytheresa’s personal shoppers work with their top clients to host events in their local communities. So far this year, it’s hosted 24 events.
“They invite us into their world, whether it’s into their homes or in rented spaces in their town,” she explained. Personal shoppers showcase the fashion and the host donates part of the event’s proceeds to their favorite charity.
“Our website is basically transactional, but our personal shoppers and offline events make it experiential,” she said, adding, “It’s the personal connection that’s the hook. That is what luxury means,” she asserted.
Tight Curation And Fast Delivery
Yet Mytheresa overcomes the transactional nature of online shopping by carefully curating website offerings to deliver only the “best of the best” luxury selections.
“Nobody has a lot of time. They don’t want 400 options when searching for a white button-down shirt. They want to see just the best 10 or 20 items so they can move on with their life. We do that and they come back time and time again,” she explained.
And Mytheresa customers get nearly instant two-to-three day turnaround for their orders, despite being shipped from its warehouses in Germany.
“I do a lot of test orders across all different retailers and find it can take up to ten days to get shipments, even if coming from New York locations. If you order from Mytheresa and ship to New York, it takes only two-to-three days,” she said.
Next Steps
In response to its top customer demands – they generate roughly 40% of its mix – Mytheresa has recently expanded its fine jewelry offerings. “In order to get the true wallet of this affluent consumer, you must have a strong fine jewelry assortment. They want unique, rare pieces that you don’t see everywhere,” Kaminetsky shared.
It also now offers paid retail media placements to increase its partners’ visibility to the Mytheresa audience. And a new Halle/Leipzig distribution center enhances its operations capabilities.
As for other growth initiatives, TD Cowen’s Oliver Chen says he regularly fields questions about the possibility of Mytheresa acquiring YOOX Net-a-Porter from Richemont.
While rumors swirl – “Acquisitions are not core to the company’s strategy,” Cowen wrote – he sees obvious strategic and financial considerations in such a deal, including YOOX’s U.S. and China distribution network, market share gains from potential synergies and alignment of customer bases.
Yet if a luxury powerhouse like Richemont can’t make YOOX Net-a-Porter work, why would Mytheresa follow in Farfetch’s footsteps with an aggressive M&A strategy that was its undoing?
While Kaminetsky couldn’t comment on the rumors, she did assert, “We are focused on our organic growth,” which looks to keep the company plenty busy.
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