It was one of the most important moments in the company’s young history, but nobody was there live. When Mytheresa, the globally successful online retailer for luxury fashion and products, went public in New York in January 2021, company boss Michael Kliger and the Mytheresa team could only sit in front of the screen in Munich. Nobody had traveled to the USA because of the pandemic, and the traditional opening of the trading day by the stock market newcomer only took place virtually. All of this is now exactly twelve months ago, the group is celebrating the anniversary of being on the stock exchange for a year.
In any case, there would have been reason to celebrate back then: the price rose significantly for the premiere. It was the first major IPO in the past year, which drew a lot of attention – and there aren’t many internet companies from Germany that make the leap to New York. Mytheresa is an online luxury goods retailer selling fashion and accessories from 250 brands and designers, including all the big names like Gucci, Yves Saint Laurent, Prada, Burberry and Valentino. It’s sort of Zalando for luxury. Zalando is an online fashion retailer from Berlin that is much larger than Mytheresa.
The business model is independent of Corona, says the company boss
Mytheresa’s business is doing well, the margins with luxury fashion are high. In the last quarter alone, sales increased by almost 30 percent. In the current financial year, the number of customers is expected to rise to a significant 800,000, and profits will be made. “We are of course a beneficiary of the pandemic,” says CEO Michael Kliger Süddeutsche Zeitung.
The business model is independent of Corona. “Especially in the luxury sector, online trade is still young and underdeveloped, and the online share of the overall market will continue to rise,” says Kliger. When he switched from Ebay to Mytheresa in 2015, four percent of the luxury industry worldwide was ordering online. Before the pandemic began, it was 12 percent, now it’s 22 percent, and the trend is rising. The online share is set to rise to 30 percent by 2025.
Only virtually: Mytheresa’s IPO a year ago – with the head of the New York Stock Exchange, Stacey Cunningham (left).
(Photo: Courtney Crow/AP)
Anyway, luxury is after one Investigation by the management consultancy Bain back in trend. “The luxury goods industry is experiencing a true renaissance,” explains Bain expert Marie-Therese Marek. Consumers are treating themselves to some of the money they couldn’t spend during the pandemic. And status symbols are also back in fashion. The sales of premium brands with clothing, shoes, bags, perfume and jewelery were again at a good 280 billion euros in 2021 and thus again above the pre-crisis level.
According to forecasts, the luxury market should continue to grow in the medium term, by six to eight percent a year, with online sales becoming increasingly important. The large providers make about 40 percent of online sales on their own websites. The rest is accounted for by specialized platforms such as Mytheresa, Farfetch or Net-a-porter.
“We are growing very strongly in Asia and the USA,” says Kliger. “The IPO in New York has certainly increased our profile in the USA. Mytheresa will open further international offices in order to be closer to our customers.” The company, which is headquartered in Aschheim near Munich, has been active in New York since last summer. On average, customers order from Mytheresa for around 600 euros. Kliger sees platforms that have many brands at a clear advantage. Because the customers are looking for inspiration and want a choice, then they will keep coming back.
In the company since 2015 and also involved: Mytheresa CEO Michael Kliger.
(Photo: Friedrich Bungert)
Top customers buy up to 30 times a year. The frequent users are of great importance: Three percent of Mytheresa customers alone account for 30 percent of the total turnover, according to Kliger. In order to retain customers, Mytheresa is now also working with the French platform Vestiaire Collective. Used luxury goods can be sold there in an uncomplicated manner, and customers then receive vouchers for Mytheresa.
“Our strategy is not growth at any price,” says Kliger. The luxury brands that Mytheresa works with have a serious business model and are not interested in a partner who could eventually get into financial difficulties. “That would be extremely uncomfortable, especially for luxury brands,” says Kliger. Because many of them fear nothing more than that the goods will be sold at far below the price and their image will suffer as a result.
When more shares come onto the market is a matter of time
The online retailer Mytheresa has only been around for 15 years, but the story is checkered. It all started in 1987 with a small designer fashion shop in downtown Munich called “Theresa”. In 2006, the then owners started an online shop with the address Mytheresa.com in the rooms directly above the shop. The parcels used to be packed down in the Munich shop and sent to the post office. But soon everything became much bigger and more international.
After the founders said goodbye, a financial investor got involved. In 2014, Mytheresa was bought by Neiman Marcus. The US company, which is more than a hundred years old and which includes the well-known luxury department store Bergdorf Goodman in Manhattan, has since gone bankrupt. Thereafter, Mytheresa was owned by financial investors who were also shareholders of Neiman Marcus, as well as Neiman Marcus’ lenders. All have pooled their shares and have held 80 percent of the company since the IPO.
“Mytheresa’s free float is currently still very low, which doesn’t make us very attractive for larger investors or funds,” says Kliger. But that is only a matter of time: “Everyone in the market knows that our investors want to sell at some point. They have no long-term strategic interest in Mytheresa.”
This uncertainty is probably one of the reasons for the recent poor performance of the Mytheresa share. The issue price a year ago was $26, after which the paper rose significantly and has been falling again since November. Mytheresa stock is currently below $20. “We’re in a much better position than ever, but the share price doesn’t reflect that,” criticized Kliger, who himself holds about one percent of the company. He and the entire management are not satisfied with the share price. “We see ourselves clearly undervalued,” says Kliger.