By Samantha Conti
with contributions from Evan Clark
 on January 21, 2021
Simone Rocha, Michael Kliger, Roberto Eggs

LONDON — Already profitable, and soon to be debt-free, Mytheresa is ready to take on fashtech’s big guns after a successful initial public offering on the New York Stock Exchange Thursday morning.

In a sign of these locked-down times, chief executive officer Michael Kliger, who’s helmed the multibrand fashion and luxury retailer since 2015, could not be on site to ring the bell, but instead did it virtually together with Stacey Cunningham, president of the exchange.

Even with the company principals confined to the retailer’s headquarters in Munich, Mytheresa delivered lush returns soon after the opening bell rang.

The retailer saw its stock rise 19.2 percent to $30.99 on Thursday, leaving it with a market capitalization of $2.7 billion, trading under the ticker MYTE.

Less than 24 hours earlier, the German e-commerce company had priced the IPO at $26 a share, well above the $16 to $18 it was looking for just last week.

Mytheresa made $354.8 million and plans to use much of that money to pay back a loan from Ares, which also sold $52 million worth of the e-tailer’s shares in the offering. The private equity firm Ares Management took over Mytheresa after the protracted bankruptcy proceedings of the retailer’s former parent, Neiman Marcus Group.

Kliger said in a video interview Thursday that $207 million would be used immediately to wipe out the company’s shareholder debt, and to make a fresh start.

And he’s raring to go.

The rest of the millions raised will go toward further penetrating markets, improving the customer and brand experience and leveraging Mytheresa’s niche appeal in a market dominated by online, publicly listed giants Farfetch, Richemont-owned Net-a-porter, Alibaba and Amazon.

Yet the Mytheresa CEO is undaunted by the size and scale of the competition and sees only the potential for growth — for everyone.

“The online market will triple, and we have seen great potential around the world, particularly in the U.S., and in Asia, markets where we already have good business, but where we lack resources on the ground. The money from the IPO will drive future growth on a global customer base,” he said.

The focus, he added, will be on localization, “how we speak to, how we reach and how we touch customers. It’s really about building brand awareness, making it local to customers, having more personal shoppers on the ground. We’ll also be running campaigns for Mytheresa itself, and making it less of a hassle for the customer to shop. And that, of course, costs money.”

Unlike other hyped-up tech darlings, Mytheresa is actually the rarest of beasts in that it turns a profit. For the year ended June 30, the company’s adjusted income rose 22.2 percent to 19.3 million euros as sales increased 18.6 percent to 449 million euros.

“Growth is a priority,” said Kliger, adding that Mytheresa has been growing by 25 percent each year and plans to keep up the pace, projecting future revenue rises of 22 to 25 percent.

Asked about how a relatively small operation like Mytheresa can compete alongside rival platform Farfetch, which has a market cap of $21.1 billion, revenues of $437.7 million and losses of $537 million in the third quarter alone, Kliger didn’t hesitate in responding.

“Scale does matter but what you really need to nail is your positioning. What customer are we after? I think Farfetch is an amazing business, but they’re going after other customers, and that’s good.

“We need to offer something that really creates loyalty for our customer base, we are trained in our platform, and we are much more focused on our offer — and on the high-end. We have very high-spending customers and, most importantly, we serve a customer who is interested in multibrand curation and inspiration,” he said.

Mytheresa is an online business born from a single physical shop in Munich. The retailer has never forgotten its roots in serving a small, wealthy and loyal customer base. The women’s shop is still open for business, in Munich’s Old Town, and last year Kliger added a men’s unit as it launched the category on the site.

Kliger said the Mytheresa customer shops regularly, returns to the site, but isn’t necessarily looking to find a specific product. The customer, he added, wants to explore and enjoy the journey. And they’re not chasing discounts or deals.

“They say, ‘show me, inspire me’ — and don’t make me trawl through endless pages, or multiple shops. We need to serve that customer, and we will grow with that customer. And I think that’s well understood by the investors,” Kliger said.

Mytheresa has long cultivated a specific customer base — and an ultra-high-end set of brand partners — and will continue to do so.

In an interview in September, Kliger told WWD “focused buying has always been one of our tricks. One of our beliefs is ‘don’t go broad,’ even if there is a big collection. We force ourselves to buy what we believe in, and what’s right for our customers.”

Kliger said about 3 percent of all of Mytheresa’s customers generate 30 percent of the business, and the retailer works hard to please them.

“We focus on customers who build wardrobes, who buy several times a season. We launched skiwear because we discovered that this is a pastime of our customer base. We work very intimately with them, and we have ideas like the Moncler Generation or Dolce & Gabbana capsules. Those efforts continue to drive our business and get our customers excited.”

He added that there are definitely customers out there who buy “iconic pieces, they save money for them, they make an investment. But this is not the customer base we focus on.”

The retailer loves nothing more than a brand partnership, and a set of exclusive products.

Even during the darkest days of lockdown last summer, Mytheresa was pumping out all sorts of capsules: There was a his-and-hers Balmain collection and a Brunello Cucinelli capsule for the whole family (Mytheresa has a robust children’s wear business), while a “Moncler Generation” collection launched earlier this month. The capsule includes women’s, men’s and children’s wear — as well as outerwear for dogs.

Last week it partnered with Bottega Veneta, securing two exclusive styles from the label’s Wardrobe 01 collection, new versions of the Cassette bag, priced at 2,850 euros, and the Stretch sandal at 690 euros.

In the interview on Thursday, Kliger said he believes there’s room for many business models in the growing market for online luxury fashion. “It’s not a question of whether one model will win, and it’s my firm belief that there are many different customers. [In the end] it’s the customer who decides where they want to shop.”

He also argued that “the luxury shop is moving online — and that’s independent of the pandemic. Growth happened before, and it will happen afterward, because we all hope the pandemic ends soon,” said Kliger, adding that online sales of luxury fashion will multiply from 12 percent of overall revenues in the sector to 30 percent in the long term.

Kliger said once life returns to normal, “there will be an absolute desire to go back to [physical] stores…but, that will not change the long-term trend toward more online sales.”

Asked how much his day job will change now that he has to answer to the markets, Kliger said there will be additional demands, and the responsibility of “executing on our company guidance.” He said his real duty going forward is to “serve the customer, and the brand relationships.”


Fashion’s Tech Set On Wall Street

Mytheresa joins a growing field of next-gen fashion companies in the public markets. Here, the current valuation standings.

Company Market Capitalization (in billions)
Farfetch $21.1
Stitch Fix Inc. $8.6
Poshmark Inc. $5.5
Mytheresa $2.7
Revolve Group Inc. $2.5
The RealReal Inc. $2.5
Source: YahooFinance, WWD Calculations