Mytheresa proves that multi-brand e-commerce still works for luxury brands

My Teresa

Courtesy of Mytheresa

Fashion Network recently weighed in on the decline of multibrand luxury e-commerce. “Following the end of the pandemic, luxury consumers have eagerly embraced in-person shopping again, to the detriment of online shopping and especially multibrand e-retailers, which are now in freefall,” wrote columnist Dominique Muret.

She noted that many luxury brands have “dumped” the channel in favor of their own monobrand stores and are increasingly using their online platforms as a digital “helper” to attract luxury shoppers to stores.

Against this backdrop, Mytheresa stands out, ending fiscal year 2024 on June 30 with annual revenues growing 10% to $935 million (€841 million) and gross merchandise value (GMV) exceeding $1 billion (€914 million). Average order value (AOV) also increased, reaching almost $800 (€703) from $727 (€654) last year.

Luxury multi-brand retail on the ropes

While the decline in multi-brand retail sales is felt most strongly in luxury department store channels – falling 8% to 12% in 2023 – multi-brand e-commerce sales are down about 1% in 2023 compared to 2022 levels.

Overall, wholesale distribution is now much less important to luxury brands than ever before. For the first time in 2023, luxury retail channels (52%) overtook wholesale distribution (48%) in terms of sales share, according to Bain & Company’s 2024 Global Luxury Goods Update. As recently as 2019, around 60% of luxury brand distribution was through wholesale.

Not surprisingly, the multi-brand luxury retail landscape, both in department stores and online, has seen massive turbulence: Matchesfashion closed, YOOX Net-A-Porter went into limbo under Richemont, and Farfetch was rescued at the last minute by Coupang.

Mytheresa is the exception to the rule. CEO Michael Kliger confidently stated: “We have clearly confirmed our position as the best luxury digital platform. Mytheresa is building a community for luxury enthusiasts.”

Reference points

Mytheresa prides itself on long-standing partnerships with elite luxury brands including Bottega Veneta, Dolce & Gabbana, Givenchy, Gucci, Loewe, Loro Piana, Saint Laurent, Valentino and many more, giving clients priority access to new launches and exclusive capsule collections.

Mytheresa also broke the digital barrier with real-life experiences including:

Multi-day, “money can’t buy” experiences for top clients in Italy with Brunello Cucinelli in Lago d’Orta and Capri hosted by Dolce & Gabbana, as well as a yacht cruise with Valentino in Nice, France, throughout the year
East Hamptons summer pop-up shop with Flamingo Estate attracts over 6,000 visitors
Style Suite personal shopping events are held in luxury shopping malls around the world, wherever the best shoppers gather.

Relying on your best customers

Mytheresa’s best clients are the “luxury enthusiasts” it so diligently cultivates. They represent clients with the potential to spend more than $40,000 (€39,000) on average per year, and in 2024, the best clients accounted for almost 40% of its GMV, up from a third in fiscal 2021.

The company also reported that the number of top customers increased by 3% and their average order value (AOV) increased by 5% in the fourth quarter of 2024 compared to the same period last year.

US sales are growing rapidly

Another significant achievement in 2024 was the 25% increase in revenue in the US, from $153 million (€137 million) to $172 million (€172 million).

Since the United States has the largest population of high net worth and ultra high net worth individuals, they can continue to count on attracting their patronage in the future. Their Net Promoter Score of 83%, which the company says is the best in the industry, should help spread the word about Mytheresa.

The United States currently accounts for 20% of the company’s revenue, up from 16% in fiscal 2022. Europe, excluding Germany, accounted for 40% of revenue, Germany for 15%, and the rest of the world for 25% in fiscal 2024.

Do the pros outweigh the cons?

A TD Cowen research note by Oliver Chen stated, “We continue to like MYTE’s core competitive strengths in terms of curating premium luxury editions, generating unique content and delivering a convenience-driven customer focus.”

Cowen also praises its carefully curated product offering and exclusive capsule collections created in collaboration with luxury brands.

However, Cowen warns of a potential increase in customer acquisition costs, which could make it more difficult to acquire new customers in the current uncertain macroeconomic environment.

“Strategically, we believe MYTE should focus on physical customer acquisition, retention and awareness investments, which can help reduce customer acquisition costs more effectively over the long term and provide a more compelling path to compound growth,” Cowen advises.

Mytheresa currently forecasts GMV and net sales to grow between 7% and 13% in fiscal 2025. Signaling caution, Cowen just lowered its revenue forecast from the previous +12.4% to +8.6%, which would imply reaching $1 billion (€915 million).

“We are monitoring a slowdown in spending by aspirational shoppers and continued promotional intensity,” Cowen noted, adding that competition from a combined Neiman Marcus and Saks business “will be something to watch.”

But Cowen also sees value in the long-standing relationships with luxury brands that Mytheresa has built since it was founded more than 30 years ago in Munich as one of the first multi-brand luxury boutiques in Germany. In 2006, it successfully moved its show online.

As long as Mytheresa can keep leading luxury brands in its orbit, it can count on the world’s luxury enthusiasts to beat a path to its doors. No self-respecting fashionista dresses head to toe in one luxury brand, and that’s Mytheresa’s ace up her sleeve.