Mytheresa Inks Pre-owned Watch Deal With Bucherer, Courts Top Clients

LONDON — From the boulevards of Los Angeles to the slopes of Aspen, Colorado, and the piazzas of Capri and Venice, Italy, Mytheresa has been rolling out the red carpet for high-end customers, who are generating double-digit growth for the company in a tough macroeconomic climate.

Mytheresa’s special events and “money-can’t-buy” experiences in cities and resorts worldwide have been paying dividends for the retailer, which reported an 18 percent uptick in GMV, or gross merchandise value, in the three months ended March 31.

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GMV rose to 219.8 million euros, while net sales were up 17 percent to 198.9 million euros. The double-digit GMV growth compares with 7.8 percent in the second quarter and 20.8 percent in the first quarter.

Mytheresa chief executive officer Michael Kliger said the company was “very satisfied” with the company’s performance, adding that the engine behind growth in the quarter was the big-spending client. That trend is likely to continue into the fourth quarter, the company said.

“We believe that for the next couple of months, the aspirational, occasional shopper will remain in a wait-and-see mode, so business growth will continue to sit with top customers — and that’s where our focus will be,” Kliger said.

The number of top customers is growing, as is their spend.

In the three months to March 31, the top 3 percent of customers generated 36 percent of Mytheresa’s sales, a trend that’s similar to rivals including Net-a-porter and Neiman Marcus, where an elite group of customers can drive up to 40 percent of the business.

An image from Mytheresa's latest standalone men's campaign.
An image from Mytheresa’s latest stand-alone men’s campaign.

Mytheresa’s small-but-mighty group of shoppers grew by 28 percent in the quarter, and in GMV terms they spent 37 percent more than in the corresponding period last year. On average, their order values were more than two times higher than those of the average Mytheresa customer.

Mytheresa defines these top customers as ones who “fulfill a significant level of annual spend,” and who are influential in their local fashion community.

These customers have long been in Mytheresa’s sights and the brand has worked hard over the years to cultivate them, whether that’s with gondola rides in Venice; live events with designers, or pop-ups in places such as Aspen.

In addition to staging events around the world — the Mytheresa team will be in Los Angeles for a Loewe event next week — the retailer continues to build personal shopper teams and has opened styling suites for top customers from Riyadh to Arkansas.

“These customers want, and expect, personal outreach, and we want to build personal relationships with them,” Kliger said.

In return, these customers deliver, especially in tough times.

While the average Mytheresa customer may be stuck in “wait-and-see” mode, delaying big-ticket purchases; waiting for items to go on sale, or shopping around for bargains on rival sites, the wealthier consumers want to buy, buy, buy — and at full price.

<a href="" rel="nofollow noopener" target="_blank" data-ylk="slk:Michael Kliger;elm:context_link;itc:0" class="link ">Michael Kliger</a>, CEO of Mytheresa.
Michael Kliger, CEO of Mytheresa.

KIiger said these top clients are spending their money on “quiet, timeless” luxury, and making considered purchases. They favor quality, fabric and material over logos, and high-ticket, ready-to-wear items.

“The party trend has cooled off, but vacation and resort is as strong as before. I do believe there is a mindset out there of customers continuing to spend,” but in a more considered way, Kliger said.

He added that Mytheresa’s new tie-up with Bucherer for luxury pre-owned watches is another way of speaking to these high-end customers.

As of this week, shoppers will be able to buy more than 25 luxury brands such as Cartier, Jaeger Le Coultre and Audemars Piguet on the site. They’ll receive a two-year warranty, and access to authorized watchmakers that will be able to repair or replace any parts. Prices on the site will be as high as 100,000 euros.

Kliger said the partnership with Bucherer shows that Mytheresa is “continuously building relevance” for its top customer base. The deal follows a successful resale partnership that Mytheresa forged with Vestiaire Collective in 2021.

While Mytheresa may be doubling down on efforts to woo the high-end consumer, it continues to value its broader customer base and believes those “wait-and-see” consumers will return in the next months as soon as inflation, interest rates and the general anxiety in the markets begins to settle.

Mytheresa said it attracted more than 124,000 new customers in the third quarter. It also saw strong repurchase rates from previously acquired customer cohorts, while the GMV growth across the entire customer base was 4.3 percent.

Mytheresa has also completed a major, multiyear re-platforming across all user interfaces, and added “state-of-the-art” e-commerce capabilities, part of a strategy to enrich its relationship with all customers.

While top-line growth was in the double-digits in the third quarter, gross margin came under pressure.

Gross profit margin was 45.6 percent, compared with 48.8 percent in the prior year, “due to a significant increase in promotional intensity by competitors,” eager to clear stock.

Kliger said that instead of buying early in the season, some shoppers were waiting for sales or looking for bargains on other sites, denting Mytheresa’s full-price business. Mytheresa has long been strict about sales and promotional periods, and the company said it did not engage in price wars during the period.

In the three months to March 31, Mytheresa said adjusted EBITDA was 3.2 million euros, representing an adjusted margin of 1.6 percent. It reported adjusted operating income of 0.1 million euros and adjusted net income of 1.4 million euros.

By region, the strongest GMV growth came from the U.S., which was up 27 percent compared with the corresponding period last year, while Europe rose 19 percent.

By contrast, China posted slow growth following the lifting of lockdown at the start of the year. Kliger said there are already signs of a “strong recovery among domestic consumers” in the region.

The Mytheresa team was in Shanghai a few weeks ago, launching four exclusive capsule collections by Chinese fashion designers, part of the retailer’s new China Designer Program.

As reported in April, the turbulent macroeconomic backdrop forced the company to update its projections for the full fiscal year, which ends on June 30.

GMV will grow 13 to 15 percent, landing between 845 million euros and 860 million euros.

That compares with a previous GMV projection of 865 million euros to 910 million euros, representing 16 percent to 22 percent growth.

Net sales growth for fiscal 2023 will now range from 750 million euros to 765 million euros, representing 9 percent to 11 percent growth.

Previously, net sales were set to range from 755 million to 800 million euros, with 10 percent to 16 percent growth.

In addition, adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, will be in the range of 34 million euros to 43 million euros. The adjusted EBITDA margin will now range between 4.5 percent and 5.5 percent.

That compares with an EBITDA projection earlier this year of 68 million euros to 76 million euros, and an adjusted margin of 9 percent to 9.5 percent.

Shares in Mytheresa closed down 3.1 percent at $4.33 on Wednesday.

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