Growth at Mytheresa slowed significantly in the last quarter as aspiring customers, feeling the pinch of inflation, cut back on holiday spending, CEO Michael Kliger said.
Sales in China — a growth market where the company has been investing heavily — also contracted as a result. the sudden reversal of the government’s strict Covid-zero policy has caused coronavirus infections to soar, he said.
Mytheresa said the value of goods sold (GMV) on its platform rose 7.8% year-on-year to €216 million ($229 million) in the three months through December 21, 2021, a slowdown from 21% growth in the previous quarter. Revenues rose just 1.3 percent year-on-year to €190 million, the Munich-based luxury e-tailer said. Profit for the quarter declined, with adjusted EBITDA falling 37 percent to €17.7 million.
“We clearly feel that the aspirational customer is under pressure,” Kliger told BoF. Actions it fell 12 percent in early trading.
The results come as players in the luxury e-commerce industry face mounting pressures, including fierce competition, the return of personal purchases and rising interest rates that have made investment capital more expensive. Rival Farfetch reported a rare drop in sales in November, sending shares plunging, while earlier this month Canadian e-tailer Ssense laid off around 7% of its workforce. Others, such as Yoox Net-a-Porter and Matchesfashion, are facing increasing losses amid ongoing recovery efforts.
Mytheresa has been working to differentiate itself from rivals by placing greater emphasis on profitable growth. The company says it is able to maintain higher margins than rivals by cultivating relationships with a more targeted group of wealthy fashion lovers. Still, the company’s stock has dropped about 30% over the past 12 months, reflecting a broader sell-off in e-commerce.
Despite the slowdown in growth, the company confirmed the guidance for the fiscal year, albeit at the lower end of forecasts.
Doubling the growth of its high-income and loyal customer group will remain a priority, Kliger told the BoF. He sees bright spots in the economic outlook for high net worth individuals and plans to tap into the demand by continuing to stage experiences that money can’t buy — like a recent dinner co-hosted with Tod’s president Diego Della Valle at his home. in Italy – and reinforcing its range of big-ticket items.
“In terms of interest rates, in terms of the stock market, in terms of commodity prices, the outlook has improved dramatically since October-November,” he said.
Last quarter, the e-tailer added brands such as fine jewelry brand Pomellato and luxury electronics maker Bang & Olufsen to its offering.
“We’ve always focused on the end customer, but we’re likely to do so even more now,” he said.
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Mytheresa bolsters momentum in China with local designer program
The German e-tailer is launching a ‘China Designer Programme’ as part of its plans to expand its fledgling business in the main market.