Michael Kliger, chief executive of luxury e-commerce platform Mytheresa, is in Dubai for a brief stopover en route from Munich to Jeddah when we sit down to speak about his thriving platform, which seems to be bucking an industry-wide slump this year. In October, Gucci, Balenciaga and Saint Laurent parent company Kering warned of a profit slump, as sales slid 16 per cent from the previous year, while LVMH – which owns brands including Dior, Louis Vuitton, Fendi, Loewe and Bulgari – also announced a decrease, with sales down 3 per cent.
Mytheresa, in comparison, posted a profit increase of 9.8 per cent. Many would no doubt be interested in learning what magic Kliger has up his sleeve, but he insists the strategy is simple. “We have always served what we call the wardrobe building big spenders. There has been no slowdown with these people," he explains.
"They are obviously of financial means that allow them to continue to spend. While clearly there is a sector in the market who are hit by higher inflation and a hit to discretionary spending, the financial, commodity and housing markets, which are often the drivers for our core customers, are doing fine.”
With the post-Covid spending splurge easing, as consumers run out of discretionary cash and grow tired of "revenge shopping", significant slowdowns are being reported all across the luxury sector, as markets, including all-important China, slow to a crawl. While many companies look to the large number of “aspirational customers" – those eager to buy luxury, but for who it remains a major decision – instead Mytheresa focuses on a tiny fraction of clients, who are flush enough to spend more.
“What we do is much more a business-to-business mentality," Kliger says of the platform's targeted approach. "If we have a dinner with 50 people, it is highly effective for us if they are the right 50 people, such as going to Jeddah and having a local ambassador who invites 100 of the most important people in Jeddah. Hopefully, they try us and by delivering on our promises, we build our relationship. That is our core business."
In early October, Mytheresa raised more than a few eyebrows when it announced it was buying the troubled Yoox Net-a-Porter group. A formation of two very different entities – Yoox is an Italian discount site, while Net-a-Porter is a platform for high-end luxury – the two merged in 2015 and have struggled ever since. Most recently it has been Richemont that has struggled to ignite Yoox-Net A Porter, despite owning Chloe, Cartier and Van Cleef & Arpels.
Now it is Mytheresa's turn to have a go and Kliger is confident the platform is perfectly placed to help solve the issues affecting the venture. “We know that [the original merger] was not the right approach, and they have quite different requirements," says Kliger. "From our perspective, one of the challenges is how to operate a company that is sitting on a merged infrastructure."
He argues that the pair need to be separated and provided with dedicated infrastructure. "That’s where we have some unique capabilities," he adds.
“We have the infrastructure specifically built for luxury needs. We have developed our own IT structure, so we believe we can solve this – not overnight, but we can solve it. We are really qualified to advise, help and support. We have been doing this for quite a long time.“
Having started out as a physical boutique in 1987, Mytheresa shifted online in 2006. Since then, it has carved out a niche offering – a sharply curated selection of the most in-demand pieces – and has become a global player in the process. “The strongest market for us is North America. Europe is a little patchy, the UK is great for us but Germany has a very weak consumer sentiment," says Kliger.
"Luxury is something you desire. You don’t need it. So, if your sentiment is weak you say, 'Oh, I will buy it next year.'"
Germany may be slow, but Kliger is emphatic about which market is growing fastest. "Right now, the Middle East is our most dynamic market," he explains.
