Online luxury retailer Mytheresa.com is defying the recent struggles faced by the luxury sector and outperforming its peers by focusing on sales to the world's wealthiest shoppers. CEO Michael Kliger attributes their success to the fact that these high-end customers continue to spend, as the economic problems have not significantly impacted their outlook on luxury spending. Each of these elite shoppers spends $100,000 or more annually on the platform.
While sales from aspirational luxury shoppers, who increased their spending during the pandemic due to extra savings, have been slowing down, Mytheresa is still flourishing. To further cater to their high-profile clientele, the company has expanded its offerings to include luxury children's wear and home goods. Additionally, Mytheresa organizes exclusive events such as private cocktail receptions, with a recent one hosted by fashion icons Domenico Dolce and Stefano Gabbana at their home in Portofino, Italy.
Mytheresa's top clients, although they represent just 3% of the total customer base, account for a staggering 39% of the company's business, a significant increase from 33% in 2021. This highlights the immense value these customers bring to the retailer. Consequently, Mytheresa expects a continued upward trajectory, projecting net sales to grow by 8% to 13% in the fiscal year ending June 30, 2024. The company also anticipates a margin on adjusted earnings before interest, taxes, depreciation, and amortization in the range of 3% to 5%.
In contrast, Mytheresa's competitor, Farfetch Ltd., has faced challenges, recently lowering its full-year projections and reporting weaker-than-expected revenue for the second quarter. This stark contrast has been reflected in the market, with Mytheresa's shares surging by 16% in New York trading.
According to Kliger, most of Mytheresa's top spenders are high-powered business leaders who are time-poor and seek a curated selection. They don't want to waste time scrolling through endless pages of options. Mytheresa understands this need for efficiency and focuses on providing a well-curated product range rather than overwhelming customers with an oversupply of choices. As Kliger puts it, "Inspiration cannot be done with an oversupply of product. Sixty dresses may still be inspirational — 200 is tiresome."
Overall, Mytheresa's strategic focus on targeting the world's wealthiest customers through curated selections, expansion into new categories, and exclusive events has proven to be a winning formula. While other luxury retailers grapple with a slowdown, Mytheresa continues to flourish and strengthen its position in the luxury e-commerce market.