Mytheresa CEO: Luxury sector is accelerating

Yahoo Finance’s Brian Sozzi and Julie Hyman speak with Mytheresa CEO Michael Kliger about the company's latest quarter, the state of luxury retail, outlook, and much more

Video Transcript

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JULIE HYMAN: Online luxury retailer Mytheresa reported 36% growth in its net sales for its fiscal fourth quarter. The company reporting relatively robust demand here, even as earnings per share trailed estimates by a bit. Let's dig into the numbers more with Michael Kliger. He is the CEO of Mytheresa.

Thank you for being here, Michael. I wanted to ask you, first of all, just kind of a broad question about demand right now, where you're seeing demand, in what kind of product are you seeing the strongest demand, and in what geographies are you seeing the strongest demand?

MICHAEL KLIGER: Thanks for having me. On products, it's really the categories that, of course, suffered from the conditions last year. So we see great uptake in dresses, great uptake in heels and clutches, so really the trend to going out again, joining festivities.

And then also vacation. People love to go back on vacation. And so we saw good uptakes also on beachwear and sandals. Geographies, the US is leading. We reported 133% growth in the fourth quarter in the US, by far the fastest-growing sector-- geography for us.

BRIAN SOZZI: Michael, we're hearing from a lot of retailers, they're having difficulty getting product to market because of all sorts of supply chain issues during the pandemic. Are you having difficulty getting product?

MICHAEL KLIGER: Luckily, no. We were impacted last year. We only sell luxury goods, luxury products. They are predominantly produced in Europe. So we saw an impact last year when production stopped in Italy in March, April, May. But for fall, winter, we are delivered as good as in 2019. So luckily, we seem to be insulated in our sector from the problems that we hear about.

JULIE HYMAN: And you all also are getting a little bit into beauty, had a beauty pop-up collaboration with some of the Estee Lauder brands. What kind of demand were you seeing there? And is that going to be a growth category for you?

MICHAEL KLIGER: Yes. Correct. I mean, we had a wonderful collaboration with Estee Lauder companies. We are, of course, looking at other luxury lifestyle categories to amend our offer to our top customers, and beauty is, not surprisingly, one of those categories. We are really interested in who is buying something like that, does it end up in the same basket, do we create new baskets?

And that's where these initial pop-ups, and we will do more pop-ups in the next couple of months, really help us to understand what type of consumer demand are we facing here. And also, too, beauty is a big category. We believe skincare is highly attractive, but we also like to understand, of course, fragrances and decorative cosmetics. So very happy with the first pilot, but we are still exploring.

BRIAN SOZZI: Michael, are you having any difficulty getting customers or just keeping customers on the platform as they become more mobile? Certainly it's a different shopping situation today compared to one year ago.

MICHAEL KLIGER: You're absolutely right. I mean, what we saw in the last 12 months has been really a change in consumer behavior. Luckily, many of those changes are actually in our favor. So the share of online in luxury has really accelerated. It is a sector that is still trailing some of the other consumer sectors. So we have now slightly south of 20% online share in luxury. We still believe we can grow to 30% by '25.

The share of mobile is going up again. During the pandemic, the choice for devices was more desktop, but now it's back in mobile, which is also good for us, because we really focus on the mobile devices for our business in terms of web design, in terms of our app. And then during the pandemic, of course, there was a bigger focus on loungewear, on tops, on sneakers.

And now back in outerwear, back in evening wear, that tends to bring also higher baskets. So we saw in the fourth quarter a huge jump up in top customer spend on our website, which is driven by occasions. I mean, our top customers start spending when they have occasions to wear luxury goods.

JULIE HYMAN: We need some occasions, don't we? We are sore we have sorely been missing occasions. Just to piggyback on Brian's question, your growth in new customers was 110,000, which was a record for you. So what kind of retention are you seeing? And what kind of investments are you making in retention of those customers?

MICHAEL KLIGER: Very important questions. We saw over the last couple of quarters huge jumps in new customers, which is good. But the complete answer is only when you see what is the retention on these new customers, the repurchase rate, as we call them. So we always look at new customer cohorts within the first 90 days, what is the repurchase rate of those?

And we are very lucky and proud to report that the repurchase rate of, for example, the Q2 new customer cohorts is now in Q4 better than the Q2 new customers that we acquired a year ago. So we not only acquire a record number of new customers, but the repurchase rate is stable, if not even slightly higher. What do we do to achieve that? One core focus is, of course, always capsules, always new products, products that you can only find with Mytheresa, very high focus on excellent in service.

We use the net promoter score internally. Q4 saw another increase. So it's not only attracting customers, but convincing them with the offer, with the service that this is the best platform for luxury. We predominantly refrain from promotions and discounting, because we saw in the past that such customer cohorts that you attract with this method only stay on if you continuously offer discount. And we are very much focused on a full-priced business in line with the overall strategy in luxury.

JULIE HYMAN: Interesting. And we certainly have seen ability to hold price for many different categories now versus several years ago. Michael Kliger, Mytheresa CEO, good to catch up with you. Thanks for the time this morning.