Managing Mytheresa as a Luxury Brand: Insights from CEO Michael Kliger
In an industry filled with uncertainty, there are concerns about the future of luxury e-tailers. However, Mytheresa’s CEO, Michael Kliger, is confident that his brand will not just survive, but achieve double-digit growth this year. Mytheresa’s success can be attributed to several factors, including German efficiency, meticulous shopping, and strategic collaborations with popular brands. The brand also focuses on building emotional connections with its customers through exclusive events held in premier locations, such as an upcoming soirée in Vienna with Miu Miu.
Kliger is excited about Mytheresa’s upcoming events, which include soirées with Givenchy at the renowned Théâtre des Variétés in Paris and with Miu Miu in Vienna, featuring a dinner at the luxurious Belvedere Palace. The collaboration with Miu Miu is particularly anticipated as it combines fresh and youthful elegance that resonates with the market. With ready-to-wear accounting for 50% of Mytheresa’s business, these events are crucial for attracting top clients, editors, and influencers.
What sets Mytheresa apart is its aim to establish itself as a brand rather than just a retailer. Kliger believes in positioning the brand emotionally through its product mix. This approach is evident in their joint products, such as a recent capsule launch with Brunello Cucinelli. The campaign showcased Brunello Cucinelli’s codes, materials, and colors in an English country setting. Mytheresa further solidified its brand by organizing a trip for VIP customers to Solomeo, the medieval village in Umbria that serves as Brunello’s headquarters.
To support future growth, Mytheresa recently opened a distribution center in Leipzig airport, significantly larger than its previous facility in Munich. This strategic location allows customers to place orders until 10:30 PM and still receive next-day delivery, thanks to its proximity to DHL’s global airport hub. Mytheresa’s turnover increased by 15% to €858.8 million in the last fiscal year, and the next quarterly figures are set to be released on November 28.
Despite its impressive performance, Mytheresa’s stock has experienced a decline on the New York market. Kliger attributes this to a misunderstanding of the online market’s potential. Rather than relying on promotions and gadgets, Mytheresa focuses on providing exceptional service and creating special moments for its VIP customers to earn their loyalty and trust.
Challenging times lie ahead, with a slowdown in market demand, particularly from aspirational customers. Kliger notes that brands catering to top-tier customers, like Brunello Cucinelli, have fared better than those targeting aspirational customers. He also observes a decline in watch sales compared to the strong performance of the jewelry sector.
While certain retailers may decline, Kliger believes high-end department stores like Harrods will remain influential. He acknowledges that success varies among brands, and not all can achieve the level of success seen by LVMH. Kliger predicts a consolidation and shake-out of players in the industry, with some shrinking or losing money. However, he is confident that Mytheresa will thrive as a premium shopping destination.
As major brands increase their digital sales percentages each year, there are concerns that they may overshadow high-end e-tailers like Mytheresa. However, Kliger believes that Mytheresa’s focus on heavy spenders has been their winning strategy. While other brands generate significant demand for trendy items, Mytheresa stands out for its diverse and extensive range of choices. In fact, Mytheresa’s top 3.8% customers account for almost 39% of the business.
Mytheresa’s success is not limited to fashion alone. The brand has expanded into recreation, particularly skiwear, and recently added Balenciaga to its offerings. In previous years, they have also included Gucci and Pucci. Mytheresa recognizes the potential of activewear, which tends to sell well in January as individuals embrace their resolutions for an active lifestyle.
In conclusion, managing Mytheresa as a luxury brand involves building emotional connections with customers through exceptional service and creating special moments. Despite challenges, Mytheresa remains confident in its growth prospects and its ability to cater to its VIP clientele. With strategic collaborations, exclusive events, and a wide range of choices, Mytheresa continues to position itself as a leading destination for luxury fashion.
Useful links:
1. Mytheresa website
2. Brunello Cucinelli website
