Michael Kliger on managing Mytheresa as a brand and building emotion

By

Godfrey Deeny

Published
Nov 22, 2023

In a delicate moment for fashion and luxury, many people are predicting a major shake-out in luxury etailing, but don’t expect Mytheresa to be one of the losers, insists CEO Michael Kliger.

Like a lot of online businesses, Mytheresa has been battered on the stock market of late, but the brand is still predicting double digit growth this year. It’s success is built on uber German efficiency, eagle-eyed shopping and swift-footed collabs with happening marques. Along with a strategy of staying very close to its VICs with tony events in exclusive locations – like next week’s soirée in Vienna with Miu Miu. And, above all, even in turbulent times, managing Mytheresa as a luxury brand.
 
“Worldwide, we are all facing big unknows. Is this a frozen war in Ukraine? Is the Middle East going to get worse? Is China real estate imploding –or being managed? At least central banks have done an amazing job, getting inflation rates close to 2% so maybe a soft landing,” says the lanky CEO.

Turning to happier matters, Kliger is excited about Mytheresa’s next two soirées in Paris with Givenchy at the Théâtre des Variétés, and in Vienna with Miu Miu, with dinner in the baroque Belvedere Palace. Designer Miuccia Prada has always had a particular yen for Mitteleuropa, and even wore lederhosen as a kid when summering in the Alps.
 
“We are super happy and proud to have this collab with Miu Miu. It is one of the hottest brands – a combo of fresh and young chic for which the market has a huge appetite,” delights Michael, noting that ready-to-wear is 50 % of his company business.
 
Each event is a careful blend of top clients, editors and influencers. “It’s vital to get the mix right: clients who love to be part of the fashion world and meet designers; press as we want people to talk about it; and tastemakers for amplification. It’s vital to mix the seating,” he explains over coffee in the Four Seasons in Paris.

Mytheresa handles all expenses as soon as clients land in the event city or resort. Like on May 24, when it presented an 80-piece Dolce & Gabbana for Mytheresa capsule collection with 50 runway models in Portofino, and then started selling it online the next day.
 
In a very real way, Mytheresa always strives to behave like a brand, “and not just like a pile of stuff. That’s contrary to our fundamental belief. We want to have a personality, and that you achieve with your product mix. The key is positioning ourselves emotionally,” he stresses, mentioning a five-week pop-up this summer in East Hampton, and a four-week pop-up in LA that opens next month.
 
Increasingly what it sells are joint products, like an October capsule launch with Brunello Cucinelli, shot on Scottish artist Robert Montgomery and wife Greta Bellamacina.
 
“Our idea was to use all of Brunello’s codes, materials and color – but take out the lifestyle components of Italy and transfer them to an English country setting,” says Kliger. A year ago, Mytheresa even took a group of VICs to Solomeo, the restored medieval village in Umbria that is Brunello’s HQ.
 
Underlining the e-tailer’s confidence in the future, they have just opened a 55,000 square-meter distribution center in Leipzig airport. It’s four times bigger than their previous one in Munich, and right next door to DHL’s global airport hub, which means customers can place orders right up to 10.30PM and still get next morning delivery.
 
Mytheresa scored a hefty 15% increase in annual turnover to €858.8 million in the year ending June 30. Their next quarterly figures are due out November 28.  Looking ahead, Kliger is bullish – predicting growth of between 8% to 13 % through to next June. Remarkably, despite the impressive figures, which include an EBITDA of €41 million, Mytheresa’s stock has tanked on the New York market. Plummeting from its first IPO price in January 2021of $26 to €3.20 this past week, and reducing the market cap 15 fold to $251 million currently. To seasoned luxury eyes absurdly undervalued.
 
“Our stock has not been good. But, you see, there was an online boom in pandemic. But there is a lot of misunderstanding about the market and concern about online future, that it does not work,” he shrugged.
 
He sees the key to future success as building loyalty among VIC customers. The key? “Service, service and service – and special moments. These are very busy people and their time needs to be respected. So, they all have personal shoppers to make sure they get clothes and shoes immediately to their multi residence lifestyle. We try to build a credit on their emotional account. Like when Stefano Gabbana shows you around his home in Portofino. That’s how we get points, not with gadgets and discounts,” he expounds.

Nonetheless, he admits 2023 has been “a sticky year, with a slowdown in market demand, especially by aspirational customers.” Looking at Richemont, he notes that sales have been “fantastic in  jewelry but not so good in watches.”
 
“There is also a comparison problem. After the pandemic there was a huge boom and pent-up demand. But our top customs are still spending on recreation, vacation, fashion and jewelry. In our business, Asia is very slowly coming back; Europe is stable, but the US is growing double digit,” he notes.
 
In Kliger’s eyes, brands that focus on top customers, like Brunello Cucinelli, will do very well. While other groups focusing on aspirational customers like many Kering brands or Burberry are “sitting on a lot of inventory.”
 
Though he is an admirer of the first ideas at Burberry of Daniel Lee, who joined after a successful stint at Bottega Veneta. “You can already see some Daniel magic. But it’s very different invigorating a medium size brand like Bottega and turning around a big name like Burberry. It’s tough to refocus a brand when the market isn’t booming. You have no buffer,” he cautions.
 
But with stock prices down, is the whole luxury bricks and mortar future in question?
 
“To me, it’s not a business model discussion. Yes, some department stores are dead – like Debenhams. But Harrods isn’t dead. It will be there for generations to come. Analyst and investors look for patterns – but what’s good remains. Just because LVMH has been so successful doesn’t mean all luxury will be successful. Not every brand is Dior. You have good stores and bad stores and the same online. Sure, there will be a shake out and consolidation. Many players are shrinking and losing money but as we say in Germany, the better is the enemy of the good. And Mytheresa is a great place to shop and will thrive,” he insists.
 
Nor is he overly concerned that major brands, who are increasing their percentage of digital sales annually, will crowd our high-end e-tailers.
 
“Our focus is on heavy spenders – always has been. The clients who spend a lot are multi brand testers, to get a full wardrobe.  Brands can create huge demands with many people – with hot sneakers and hot bags. But the person shopping for a new dress for next week’s dinner will come to us. For a sensational range of choice, we are better. In fact, we are the best!” he exclaims.
 
The figures back that up. In business terms, Mytheresa’s top 3.8% customers account for almost 39% of our business. They spend over six digits a year – and buy 30 times a year and acquire a lot of ready-to-wear.
 
Another booming area is recreation, especially skiwear, with Balengia added last week, and Gucci and Pucci last year. And beyond classic classy sports, the offer includes cycling and gym wear.
 
“It’s the great unknown secret of retailing. The best time to sell active wear is January, as people say, ‘I want to be active this year’,” he chortles.