As Mytheresa awaits regulatory approval to acquire its competitor Yoox-Net-a-Porter, the company hasn’t let up on focusing on driving profitable growth at its own business.
The German luxury e-tailer sales grew 13 percent to €223 million ($230 million) in the second quarter of its fiscal year that ended in December. It also maintained its stronghold in regions like Europe and the US, where sales grew 18 percent and 13 percent, respectively. The company’s sales gains are now expected as it’s built a reputation on catering to its top customers through exclusive product offerings and in-person experiences, which has led its growth amid a broader luxury slowdown.
“The biggest and most important priority is that our existing core business performs, and it does,” said Michael Kliger, Mytheresa’s chief executive.
But it’s Mytheresa’s profit drivers that provide a glimpse into how it will remain differentiated even as it adds its biggest competitor to its stable. In its second fiscal quarter, Mytheresa’s adjusted earnings before interest, taxes, depreciation and amortisation jumped more than doubled to €16 million as it sold more full price items. The company’s average order value rose 10 percent to €736 as it increased sales in higher ticket categories like fine jewellery, where top spenders shell out as much as €20,000 per transaction. That ability to get its most important clients to make big purchases online is what will keep the company distinct from Net-a-Porter, which offers aspirational consumers a mix of high and low price points.
“The market perceives us differently, and our task will be under one common roof to take out the undifferentiating things like operations, make them leaner, better, translate them into real customer benefits. But on the customer facing [side], really present different personalities,” Kliger said.
In the meantime, Mytheresa is taking whatever steps it can to prepare for its merger, which it expects to close before July. The company is currently hiring additional technology staffers to seamlessly transition Net-a-Porter onto its in-house software platform. It’s also planning to rename its parent company from MYT Netherlands Parent B.V. to LuxExperience once the YNAP deal has closed.
Getting its integration with YNAP right is critical for Mytheresa’s future. The company expects its combined entity with YNAP to generate €4 billion by 2029. While Mytheresa remains a standout in online luxury, the success of its merger will determine its ability to stay competitive, especially as established companies like Moda Operandi and upstarts like Cult Mia similarly focus on product curation and customer experience.
But investors appear confident in Mytheresa’s ability to keep its foothold in luxury e-commerce. The company’s stock rose nearly 8 percent in pre-market trading following its earnings release.
“This remains a very competitive market because it’s a very attractive market,” Kliger said. “There are many players that are in, but also many players that will try to enter.”