How e-commerce is transforming luxury retail

Luxury retailer Mytheresa reported its first quarterly results since the company went public in January. Mytheresa CEO Michael Kliger joins Yahoo Finance Live to weigh in on the company’s strong earnings and break down the state of luxury retail amid pandemic.

Video Transcript

- Luxury retailer Mytheresa just reported its first quarterly results since its IPO in January. It posted second-quarter sales that beat estimates and jumped 33% over last year. And active customers were up 28% to 569,000. Joining us now from Munich is Michael Kliger, CEO of Mytheresa.

And Michael, on the show, we've been talking a lot about the shift in sales from services to goods and also luxury goods. And I'm wondering, just taking a look at your holiday sales results, where was the strength really driven by in terms of category, and can that be sustained heading into 2021?

MICHAEL KLIGER: Pleasure to be with you today. So we-- we, as you said, had a great Q2, strong sales growth. We are a global company, so there's a geography play. We had very strong growth in Europe and the US, so we believe some of it, not all of it, of course, but some of it was driven by the ongoing store closures.

And in terms of category, what we have seen over the last couple of months is, of course, that some of the evening gowns, cocktails, were not doing as well as some of the loungewears and cashmere. So there was a little bit shifting of categories, overperforming, underperforming. And of course, we believe there's some pent-up demand on some of the more festivity-based luxury wear and shoes and bags.

And then also, we had, of course, our menswear department-- because we only launched menswear in Jan '20-- and that also contributed to a nice growth in Q2 of fiscal year '21.

- Michael, are you seeing in your business, just looking at your data, that people are getting ready to go back out into the wild? Are they starting to rebuild their closets? Because for most, they haven't really been anywhere in over a year, and those styles have changed dramatically year over year.

MICHAEL KLIGER: You're absolutely right. I mean, the types of products that had been purchased did shift. Again, as we are a global company, that is not true for all geographies. In Asia-Pac, there has been already for quite a while festivities, red carpet events. But in Europe and the US, people are desperate to be out there again. And-- and it's hard to make a prediction whether this will happen in our Q4, which is in the months of May and June.

But we believe and hope that it will happen and it will drive a bigger shift to the categories for travel, the categories for holidays, bar mitzvahs, everything that has been postponed, unfortunately, for a while.

- Michael, there was some really interesting research that came out of Cowen recently that found about 45% of your customers typically spend more than $30,000 on your site annually, which is just an incredible figure. I wonder if you can talk to us-- maybe confirm that for us if you are able, if you have that same kind of research. And-- and talk to me about those clients, what you know about your clients.

It does seem like that that would be an area that is fairly-- I don't know if recession proof is the right word, but sort of resistant to the bigger changes in the world.

MICHAEL KLIGER: Yeah. I mean, Mytheresa is really focusing on the high end even within luxury. We only stock about 250 brands, and these are really the big luxury houses of Italy and France. And we also focus, really, on the wardrobe-building luxury buyer. So this is a buyer that comes often.

The biggest category for us is ready to wear, because you do have what we call the intermittent luxury buyer. They buy an iconic pair of sneakers or an iconic bag, but their cycle will then not create another purchase for maybe 1 and 1/2 years, whereas our core focus is really this wardrobe-building, busy professional. And the reason to turn online is their busy lifestyle. They like the convenience of buying online.

And indeed, our top customers are premier. They buy 15 to 30 times a year, and their average basket is 1,000 euros-- apologies. And that's a certain type of customer, very occasion-driven, very much looking for a multibrand offer like our website.

- Michael, what are the top three selling brands on your site, and what are they doing right?

MICHAEL KLIGER: Well, again, as I explained, our-- our offer is very much skewed to the big brands, so the brands like Valentino, like Gucci, like Saint Laurent, like Bottega Veneta. And fashion, and particularly luxury fashion, is, of course, driven by creating newness, by creating desire. I mean, we always say that our customers have the money. We need to bring the inspiration.

And "we" means brand and platform like us. And so we really bring a lot of newness, the ongoing fashion cycle, the latest styles from the runways. And we also partner with brands to bring capsule collections, pieces that are actually only available at Mytheresa.

And what makes brands exciting is to create a desire, an emotional desire to have that piece, the atmosphere of scarcity, the atmosphere of newness. And so innovation and creativity is a big part in our business, a really big part.

- And Michael, Mytheresa has talked about the online luxury market tripling by 2025. And I'm just wondering, as you see that enormous growth, what is your company really doing to become that go-to online location for these luxury brands?

MICHAEL KLIGER: Yeah, I'm glad you're pointing that out because that is an interesting characteristic. I mean, luxury is actually a latecomer to digital. It's estimated that in '20, just 12% of all luxury fashion was bought online. And so the expectation is that this will go beyond 30% by '25, very much mimicking what customers have done in other categories.

So our market, the online luxury market, is tripling. And what we are, of course, doing is we have a strong base in Europe. We are shipping today to 133 markets globally. But we still see an even higher potential in geographies like North America, in Asia, where the brand, Mytheresa, is probably not as well known as in Europe.

So we are heavily investing in brand reputation, brand familiarity. We are beefing up our teams on the ground, even though we have a global offer, because the bags of Bottega, the bags of Prada, the bags of Gucci are globally attractive and globally sought after. But really speaking to the customer, communicating, providing personal touch points, that is what drives our global expansion.

- Certainly something in terms of the digital expansion we've seen across many categories. But Michael Kliger, CEO of Mytheresa, thank you so much for joining us.