Fashion Network recently opined on the decline of multi-brand luxury e-commerce: “After the pandemic subsided, luxury consumers have eagerly embraced in-person shopping again, which has had a negative impact on the current steep decline in online purchases, especially for multi-brand e-tailers,” columnist Dominique Muret wrote.
She noted that many luxury brands are “abandoning” distribution channels in favor of their own mono-brand stores, and are increasingly using online platforms as digital “help” to drive luxury shoppers into their stores.
Against this backdrop, Mytheresa stood out, reporting a 10% increase in annual revenue to $935 million (€841 million) and gross merchandise volume (GMV) of over $1 billion (€914 million) in its fiscal year 2024, which ended June 30. Average order value (AOV) also increased, reaching nearly $800 (€703) from $727 (€654) last year.
Multi-brand luxury retailers in crisis
The decline in multibrand retail is most pronounced in the luxury department store channel, which is expected to decline 8% to 12% in 2023, while multibrand e-commerce declined about 1% in 2023 from 2022 levels.
Overall, wholesale distribution is less important to luxury brands today than it has ever been. According to Bain & Company’s 2024 Global Luxury Update, in 2023, for the first time, luxury-owned retail channels (52%) will surpass wholesale distribution (48%) in terms of sales share. As recently as 2019, roughly 60% of luxury brand distribution was through wholesale.
As expected, there has been major disruption in multi-brand luxury retail, both in department stores and e-commerce, with Matchesfashion closing its doors, YOOX Net-A-Porter in limbo under Richemont, and Farfetch being rescued at the last minute by Coupang.
Mytheresa is an exception, as CEO Michael Kliger confidently states: “We have strongly reaffirmed our position as the premier luxury digital platform. Mytheresa is building a community for luxury lovers.”
benchmark
Mytheresa boasts long-standing relationships with leading luxury brands, including Bottega Veneta, Dolce & Gabbana, Givenchy, Gucci, Loewe, Loro Piana, Saint Laurent and Valentino, giving customers early access to new releases and exclusive capsule collections.
Mytheresa also bridged the digital divide through these real-life experiences:
Dolce & Gabbana hosted multi-day “Money Can’t Buy” experiences with Brunello Cucinelli for top clients on Lake Orta and the island of Capri in Italy, as well as a year-round yacht trip with Valentino in Nice, France; a summer pop-up shop with Flamingo Estate in the East Hamptons attracting over 6,000 guests; and Style Suite personal shopping events in luxury hubs around the world where top clients gather.
Dependence on loyal customers
MyTheresa’s core customers are “luxury enthusiasts,” a demographic the company is aggressively cultivating – customers who could potentially spend more than $40,000 (€39,000) on average per year, and core customers will account for almost 40% of the company’s total gross merchandise volume in 2024, up from a third in fiscal 2021.
The company also reported that the number of top customers in the fourth quarter of 2024 increased 3% compared to the same period last year, and AOV increased 5%.
Sales in the US explode
Another notable achievement for 2024 was a 25% increase in revenue in the United States, from $153 million (€137 million) to $172 million (€172 million).
The U.S. has the largest population of wealthy and ultra-wealthy people in the world, so it’s likely to continue to attract them, and Mytheresa’s industry-leading Net Promoter Score of 83%, which the company claims, should help it spread awareness.
The U.S. currently accounts for 20% of the company’s revenue, up from 16% in fiscal 2022. Europe excluding Germany will generate 40% of revenue, with Germany accounting for 15% and the rest of the world accounting for 25% in fiscal 2024.
Do the positives outweigh the negatives?
“We continue to appreciate MYTE’s key competitive strengths including its curation of the very best in luxury, its unique content generation and its convenience-driven customer-centricity,” Oliver Chen wrote in a research note at TD Cowen.
Cowen also praised the company’s curated product selection and exclusive capsule collections in partnership with luxury brands.
However, Cowen warned that given the current volatile macroeconomic environment, customer acquisition costs could rise and it could become more difficult to attract new customers.
“Strategically, we believe MYTE should focus on investing in physical customer acquisition, retention and awareness, which in the long term will drive efficiency in customer acquisition costs and potentially provide a more attractive avenue for compound growth,” Cohen advised.
MyTheresa now expects GMV and net sales to grow in the range of 7% to 13% in fiscal 2025. Cowen has remained cautious, lowering its revenue outlook to +8.6% from +12.4% previously, to $1 billion (€915 million).
“We are monitoring the slowdown in spending from aspirational customers and continued promotional enthusiasm,” Cohen said, adding that competition from a merged Neiman Marcus and Saks “will be one to watch.”
But Cowen also recognises the value of the long-standing relationships MyTheresa has built with luxury brands since it was founded in Munich more than 30 years ago as one of Germany’s first multi-brand luxury boutiques. In 2006, MyTheresa successfully showed online.
As long as Mytheresa has top luxury brands under its wing, luxury lovers from around the world are sure to flock to the company. No self-respecting fashionista is decked out head to toe in one luxury brand, and that’s Mytheresa’s trump card.
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