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Last weekend, Mytheresa and Brunello Cucinelli invited around 80 guests to Lake Orta in western Italy to enjoy a dinner by the Michelin-starred chef Antonino Cannavacciuolo at Villa Crespi, a boat tour around isola di San Giulio and a picnic in the garden of the privately-owned Palazzo Gemelli. The occasion was the pre-launch of the Brunello Cucinelli high-summer collection exclusively on Mytheresa on 8 May.
Guests included Gossip Girl alumni Kelly Rutherford and Ed Westwick, British actress Amy Jackson and model Jasmine Tookes, as well as top clients and editors. The choice of Lake Orta, “which is often overlooked,” as Mytheresa CEO Michael Kliger noted before dinner, underscored the “quiet luxury” with which the Italian fashion brand has become synonymous.
Lavishing attention on top clients is one of the ingredients of Mytheresa’s secret sauce. Others are curation of its assortment and cost control, according to Bernstein analyst Luca Solca. Mytheresa hosts around seven weekend events like this per year, but this time the industry backdrop is notably different.
Once crowded with competitors, the luxury e-commerce space has thinned out. Farfetch and Matches have faced a fire sale and administration. Yoox Net-a-Porter’s future is pending as Richemont mulls a sale. Suddenly, Mytheresa is competing in a much smaller field of marketplaces, and its numbers buck the slump. Net sales were up 5 per cent to €385 million in the quarter ended 31 December 2023, turbocharged by top customers in the US. In the same quarter, YNAP revenue dropped 11 per cent at constant exchange rates. (Sales from Richemont’s discontinued operations, under which YNAP is presented, were €2.53 billion in the fiscal year ending 31 March 2023.)
To reassure the market, Mytheresa published a preliminary statement in April for its third quarter ended 31 March, ahead of its earnings report on 15 May. “There is a lot of uncertainty in the market with what happened in February with different players,” says Kliger. “In February, when we announced our second quarter numbers, we said: we stick to our guidance, we expect double digit growth in the remaining two fiscal quarters. We were keen to tell the market and the partners that we're on track.” Net sales grew between 15 and 18 per cent in the third quarter.
He continues: “We benefit from a market that is consolidating. The market overall is growing, but there will be fewer players, so all the good players will really benefit.”
Kliger was appointed CEO of Mytheresa in 2015, joining from Ebay, right after the acquisition of Mytheresa by the Neiman Marcus Group. Mytheresa started trading on the New York Stock Exchange in 2021. Under Kliger’s watch, sales went from approximately $130 million in 2014 to €767 million in the fiscal year ended 30 June 2023. Mytheresa is on course to surpass €1 billion by fiscal year 2025, according to the executive.
Now, Mythersea is also reportedly among bidders to acquire YNAP from Richemont as the Swiss conglomerate is looking to sell the loss-making business, after the deal with Farfetch fell through.
On the subject, Kliger says: “We always said that our main strategy is organic. We will become a multibillion euro company without any acquisition, because the market is growing and we are growing. But we also state we may use good opportunities for non-organic growth and at the moment you can look at many things because there is some distress,” he says, declining to comment “on any specific situation”. “We will not change our strategy of high-end luxury, curation and top brands,” he adds.
“Mytheresa is on a very good track,” says retail consultant Robert Burke. “The challenges are the volatile environment and customer retention as customers are gravitating towards ‘direct to the brand’. The real competition is the brands themselves,” Burke says.
Bernstein’s Solca agrees and notes that digital penetration for luxury sales has declined from a peak percentage in the high teens during the pandemic to a single-digit percentage last year. Richard Johnson, chief commercial and sustainability officer, says that Mytheresa is optimistic about the growth outlook for digital sales and its positioning. “While brand.com also stands to gain, individual brands cannot serve top customers as effectively as multi-brand, as clients will always want to build wardrobes from a variety of their favorite designers and discover new products and brands they had not previously considered,” he adds.
Would Mytheresa find significant synergies from a tie-up with YNAP? “The example of Farfetch shows that scale is not the only important thing to have a viable business in this domain,” Solca says. “Rather, it is vital to have the right proposition to consumers, like curation, coupled with a rather accurate focus on clients offering the highest lifetime value.”
Some 22 top clients were invited to attend the event in Lake Orta (11 with their partners plus 5 personal shoppers) but Kliger is clear: “This is not a selling event. We want to show our appreciation to our best customers and this is what these events are about.” And these customers spend is in the six-digit range per year.
In addition to these high-profile weekend events, Mytheresa hosts several private client events throughout the year, as well as “Style Suites”, where Mytheresa goes to a city and presents a selection of products. “There’s something happening every week, on different scales,” Johnson says. Recent events included the launch of a Courrèges capsule collection in Shanghai. Coming up next is the pre-launch of the Loewe x On ready-to-wear collaboration, and the return this summer of the pop-up in East Hampton with Flamingo Estate.
In addition to these tailored events, Mytheresa banks on a sharp curation of brands: around 250 for womenswear and 120 for menswear, not more. “If you aren’t disciplined, you slowly create that kind of middle, not really curated, not really marketplace. The middle ground is never the place to be If you want to be truly luxury,” says Johnson.
Discipline also applies to markdowns. As the market discounted heavily in the second half of 2023, Mytheresa held off. “You suffer for one, two, three months, but in the end it's multi years that you are playing for,” says Kliger. The market has returned to “much healthier” inventory levels for the Spring/Summer and Autumn/Winter 2024 collections, he says.
These weekends may not be transactional, but Mytheresa creates occasions to wear the clothes. During the picnic, where the dress code was “casual chic and flat shoes”, some clients mingled over tiramisu and gelati and took photos with Westwick and Jackson.
“We try not to be just e-commerce,” says Kliger. “You really want to be a community for luxury lovers and to be a community, you need to have the speed and the convenience of e-commerce but you also need to have these personal moments.”
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