LONDON — Big-spending consumers helped Mytheresa grow its top and bottom lines in fiscal 2023 in a brutal market for luxury fashion that won’t start improving until the second half of the current fiscal year, according to CEO Michael Kliger.
Mytheresa said its gross merchandise value, or GMV, rose 14.5 percent and hit a record 855.8 million euros in the 12 months to June 30. The number fell within a readjusted range that Mytheresa had announced as part of a sales and profit warning in April.
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Due to turbulent markets, inflationary pressures, and a slowdown in spending from “aspirational, occasional” customers, Mytheresa had dialed down its expectations for fiscal 2023.
At the time, the Munich-based retailer projected that GMV would grow 13 to 15 percent and range from 845 million euros to 860 million euros.
On Thursday, Mytheresa described the market environment over the past year as “very difficult,” while Kliger said 2023 ushered in “one of the most severe contractions that luxury has seen.” He added that the results were “excellent” despite the headwinds.
In the 12-month period, net sales increased 11.4 percent to 768.6 million euros compared with the previous year. The figure outstripped the retailer’s revised expectation of 9 to 11 percent growth, and sales ranging from 750 million euros to 765 million euros.
Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, was 41.1 million euros with an adjusted margin of 5.3 percent. Mytheresa had given a range of 34 million euros to 43 million euros, and a margin ranging from 4.5 percent to 5.5 percent.
Kliger said that “double-digit growth across all geographies as well as continued profitability sets us apart especially in the current, very difficult market environment.”
He noted the driver behind the growth was “the continued focus on the big-spending, wardrobe-building top customers and not the aspirational, occasional luxury shoppers.”
In fiscal 2023 Mytheresa’s business with its top customers grew by 30 percent in terms of GMV. Kliger said top customers now account for 40 percent of GMV.
As reported, rivals such as Net-a-Porter and Neiman Marcus are seeing a similar trend, with an elite group of customers driving up to 40 percent of their businesses.
Mytheresa’s small-but-mighty clutch of shoppers represent around 3 percent of the overall customer base and their order values are generally more than two times higher than those of the average Mytheresa customer.
Mytheresa has been courting the big spenders for years, creating what it calls “memorable, money-can’t-buy” experiences in places ranging from Venice and Paris to Aspen. Last year, Mytheresa organized a Pucci event in Capri; earlier this year it focused on Loewe in Los Angeles.
The retailer defines these top customers as ones who “fulfill a significant level of annual spend,” and who are influential in their local fashion community.
By contrast, the aspirational shoppers are in retreat. “Reality has sunk in following a crazy moment of spending” during the pandemic, said Kliger. He added that there is “too much stock in the market as well as promotional fatigue” and it will take some time before that less wealthy shopper returns.
Another big driver behind growth was the U.S. GMV rose 40.8 percent in the fourth quarter despite Americans pulling back on spending due to inflationary pressures and higher interest rates.
In the fourth fiscal quarter, Mytheresa’s overall GMV grew 13 percent to 222.2 million euros, while net sales increased 16.5 percent year-over-year to 203.8 million euros.
Adjusted EBITDA was 7.4 million euros in the three months with an adjusted margin of 3.6 percent. Adjusted net income was 0.8 million euros.
In the three-month period, Mytheresa said it saw double-digit GMV growth globally; “exceptional” GMV growth in the U.S.; and “excellent” top-customer GMV growth; and continued strong profitability.
Looking ahead, the company said that for the current fiscal year ending June 30, 2024, it is expecting GMV and net sales growth in the range of 8 percent to 13 percent and adjusted EBITDA margin in the range of 3 percent to 5 percent.
The company said it is anticipating a “much stronger” second half as the market environment improves.
Kliger said the rest of the calendar year will continue to be challenging. “There is no light at the end of the tunnel this year, but we do believe there will be improvements in the fiscal second half, from January to June 2024,” he said.
The company will also benefit and the full leverage of its recent, major infrastructure investments, namely a new, state-of-the-art distribution center at Leipzig airport, boost the business.
Kliger said the center was already open and shipping and said it will drive “tremendous growth” going forward.
This story was reported by WWD and originally appeared on WWD.com.
