MyTheresa Pivots to Savvy Shoppers With Serious Spending Power

Although the aspirational shopper appears to have paused extravagant spending, MyTheresa is cashing in on the enthusiasm of savvy shoppers who still have some serious shopping power. In its latest quarterly earnings report, the retailer not only turned a minor financial setback into a stylish comeback but also surpassed market expectations.

“As expected, we saw a slowdown in demand with aspirational customers across all geographies and a high promotional intensity in the market due to excess stock of fall-winter merchandise,” MyTheresa CEO Michael Kliger said during a call with analysts on Tuesday (Nov. 28).

“Even though the macro environment remains very challenging, we continue to prove the fundamental strengths of our business model.”

Bringing Value to a Cohort of Consumers Who Can Spend

While the prevailing retail trend this quarter revolves around providing value to customers to encourage spending, the focus has primarily centered on promotions and deals to prompt consumers to make purchases amid inflationary pressures and financial constraints.

Also read: Retailers Play the Value Card to Capture Consumer Spend

In contrast, MyTheresa has directed its efforts toward delivering value to a demographic unaffected by the strains of inflation.

According to Kliger, MyTheresa’s emphasis on a high-spending clientele dedicated to building their wardrobes has spurred growth, especially among top customers, particularly in the United States during the first quarter.

Furthermore, strong relationships and support from brand partners have empowered the company to introduce a variety of exclusive capsule collections and experiences to customers in the first quarter.

How MyTheresa Has Leaned Into Its Top Customer

“The first quarter saw again many high impact campaigns, exclusive product launches and events as well as money can’t buy experiences demonstrating our strong relationships and the support from brand partners. All of them further increased our brand awareness, brand equity and positioned us globally as the leading digital luxury platform,” said Kliger.

Exclusive product launches encompass items from Loewe, a 27-piece capsule collection by Brunello Cucinelli, an Alexander McQueen cruise collection, a curated selection of Manolo Blahnik shoes and a Loro Piana capsule collection.

The “money can’t buy” experiences included a dinner and party held in Warsaw, Poland, to celebrate the launch of the exclusive Magda Butrym capsule, a two-day experience tailored for top customers in Cadaques and Figueres, Spain, in partnership with Rabanne, as well as events hosted in Chicago, Milan, Paris and Beijing.

MyTheresa also unveiled its Holiday House, marking its second immersive physical luxury shopping experience. The Los Angeles venture, in collaboration with Flamingo Estate, will be open for the first three weeks of December.

Other Retailers Look to Deals and Bargains

Nordstrom, formerly known for its luxurious runway presentations and exceptional service, has increasingly delved into the use of discounts as a strategic approach.

In the third quarter, Nordstrom expanded its retail presence by opening 11 new Rack stores, and an additional one was introduced in the early fourth quarter, totaling 19 for the year.

During the retailer’s third-quarter earnings report on Nov. 21, CEO Erik Nordstrom said the newly opened stores have generated positive feedback.

“We also know that our Rack customers value convenience, and we believe our stores are underpenetrated,” Nordstrom said.

Despite the growing demand for off-price retailers, Nordstrom’s emphasis on discounts and value-oriented selections through Nordstrom Rack has not met expectations. Nordstrom Rack encountered a 1.8% decrease in net sales compared to its fiscal performance in 2022.

Read more: Nordstrom’s Off-Price Destination Falls Short on Value

MyTheresa by the Numbers

“We achieved strong double-digit revenue growth in the United States, grew again our business with our global top customers over-proportionally and managed to mitigate significant margin pressures with cost reductions,” Kliger said in a statement.

In the first quarter ending Sept. 30, MyTheresa posted a 12.0% increase in net sales on a constant currency basis (6.8% on an IFRS basis) year over year, reaching 187.8 million euros.

Concurrently, gross merchandise value (GMV) saw an 8% increase on a constant currency basis (3.1% on an IFRS basis) totaling 204.1 million euros for Q1 FY24, compared to 197.9 million euros in the same period of the prior year. The gross profit margin for the quarter was recorded at 42.5%.