Michael Kliger, president and chief executive of Mytheresa, has plans to expand the luxury retailer in both its offer and the markets it serves
German retailer Mytheresa has transformed from a single boutique in Munich to a force to be reckoned with in the competitive world of luxury ecommerce. Having conquered womenswear, the business is gunning for new categories and has put international expansion at the top of its agenda.
Founded by wife-and-husband team Susanne and Christoph Botschen in 1987, Mytheresa started life as a bricks-and-mortar retailer in the heart of prosperous Munich. The name was chosen because “Theresa” is easy to pronounce in many languages. After almost two decades serving the city’s well-heeled shoppers, the duo bolstered the business with an ecommerce offer in 2006.
It quickly became a serious digital contender, serving customers all over the world. The Botschens sold both the store and the website to US retail giant the Neiman Marcus Group for an undisclosed amount in 2014. The 12,900 sq ft, three-storey shop is still open, and sells more than 100 labels, including Balenciaga, Prada and Zimmermann.
Today the business is led by president and chief executive, Michael Kliger, who Drapers meets at Mytheresa’s headquarters on the outskirts of the Bavarian capital. Strikingly tall and with a smart crop of silver hair, Kliger’s CV includes stints at Ebay Enterprise, professional services firm Accenture and consultant McKinsey & Co.
Online luxury is a competitive market, but Kliger believes that Mytheresa’s tightly edited selection, close relationship with the brands it sells and mobile-first approach set it apart from its rivals. He is now taking a dual approach to expansion. Mytheresa is increasing both its offer – kidswear launched in January 2019 and menswear is in the pipeline – and the markets it serves. Growth outside Europe is a focal point, a reflection of Kliger’s belief that, in luxury, “geography doesn’t matter”.
Kliger’s detailed knowledge of retail’s highs and lows shines through as he explains the Mytheresa proposition. He is aware that shoppers can pick from a plethora of luxury multi-brand players, such as Net-a-Porter, Matchesfashion, Browns and 24S – but argues that a carefully curated edit is the reason why Mytheresa’s time-pressed customer shops with the retailer over its competitors. It stocks around 250 labels – significantly fewer than, for example, Matchesfashion, which carries 450 brands.
The selection and the edit is the core element of what we try to do for our customer
Michael Kliger, Mytheresa
“The main benefit we offer to our customer is the selection,” he explains. “You try to find the best brands and, within those brands, the most intriguing and luxurious pieces. The selection and the edit is the core element of what we try to do for our customer. We don’t believe in being a catalogue for all products and all brands.”
It is a strategy that is paying dividends. Net revenue at the Mytheresa Group was up 25.7% to €272m (£240m) in the nine months to March 31. Full-year figures for Neiman Marcus do not split out Mytheresa results, and it does not reveal profits.
Top performers for Mytheresa include Balenciaga, Chloé, Gucci and Prada. The retailer prides itself on collaborating closely with designers on exclusive collections, capsules and products to help further differentiate its offer. Recent projects have included exclusive collections with Dolce & Gabbana, Erdem, Balmain and Valentino, as well as a 12-piece capsule range with Budapest-based designer Nanushka.
“We have to demonstrate to our customer that we are in close collaboration with these brands and give them that added value, that uniqueness,” Kliger says. “Big [catwalk] shows are now shown immediately, everywhere around the world. By the time the product arrives in the shops, die-hard fashion fans say: ‘I’ve seen that before. It’s great that I can shop it, but I’ve seen it.’”
A core element of Mytheresa’s strategy, he adds, is being “the best possible partner” to its brands: “We need to work and collaborate with our vendors, because they are creating these amazing products that consumers dream about. We have to have the best collaborations, the best events. Customers can trust our selection because we are so close to the designers.”
A mobile-first mindset is another pillar of the Mytheresa approach. Kliger claims that the retailer has the largest share of mobile sales in the luxury industry – more than 50% of sales are made on mobile and between 70%-80% of page views are made on a mobile device.
“Being present on the shopper’s device and making it easy for her is incredibly important,” says Kliger. “We’re not perfect – we still have issues filtering and searching – but the test is whether someone can go through the site and check out in the same amount of time it takes for traffic lights to change. We take out as much of the typing as possible with menus and pre-populated entry fields.
“We also do a lot with push notifications – if you opt in, you receive a push notification from us when your order is received or shipped, or about your refund. Most people shop using their private email address, which means you have to connect to your email and look for the message – that’s already a hassle. A push notification you see on your screen straight away. That half a second gives you peace of mind.”
International expansion is another key focus for Mytheresa. Although Germany is still the largest territory and is enjoying healthy growth, the domestic market’s weight in Mytheresa’s overall country mix is shrinking as a proportion of sales as it expands overseas.
Mytheresa is a window for us, as an emerging brand, to gain international visibility
Jingjing Fan, Elleme
Kliger sees continued opportunity in Europe but is also excited about the potential of China, Korea, Thailand and Malaysia: “More than half the business comes from Europe, 25% from Asia and 10% from the US, which is growing very quickly. The rest comes from other international markets – we ship to 140 countries, so we do ship to places such as Fiji and India, even if isn’t big business yet. If you’re in the fashion crowd, geography doesn’t matter. A Chloé Nile or a Gucci Dionysus bag carries weight all over the world.”
The retailer’s international approach is part of its appeal for brands.
“Based in Europe but with a global reach, Mytheresa is a window for us, as an emerging brand, to gain international visibility,” explains Jingjing Fan, founder of accessories label Elleme, which has been stocked by Mytheresa from spring 19.
As well as targeting new markets, Mytheresa is expanding its offer. It unveiled kidswear in January, launching with 35 brands for girls, boys and babies. Customers can shop kidswear ranges from luxury labels such as Burberry, Balmain, Dolce & Gabbana and Fendi. Kidswear felt like a natural next step for the retailer as the luxury market for under-tens continues to gain traction. The company does not reveal the current percentage of sales that childrenswear accounts for, or what it anticipates it growing to.
“We’re coming from what is of interest to our customers, half of whom we know have families” Kliger explains. “Some of them may not feel that luxury is for kids, but some do. It also came because we noticed a lot more luxury brands were sitting up and taking kidswear seriously – either by starting kidswear lines or bringing [existing] licensed businesses back in house. Also, the casualisation of the luxury market makes it much more suitable for children.”
Kidswear brand Rachel Riley is happy to be stocked on Mytheresa Kids, its eponymous founder says: “Mytheresa has a great presence both in Europe and overseas, so from a business and branding perspective, it meant a great deal to be part of their kidswear launch.”
With womenswear and kidswear now under its belt, Mytheresa now has set its sights on the menswear market. The retailer will launch its first menswear offer, of around 120 brands, in January next year, and hopes to hit the market with a unique perspective that reflects a return to a more tailored look after the long stranglehold of streetwear.
“You could say, ‘Well, why didn’t Mytheresa launch menswear five years ago?’ And that’s a fair question,’” Kliger says sanguinely. “We feel that now is the perfect moment because luxury menswear is really accelerating – we hear from a lot of our brands that menswear is driving the growth.
“And although the streetwear boom has really given menswear a kick, there is a slight shift back to suiting. It’s a great moment to come into the market and present that viewpoint. We’re not talking about going back to the tailoring of ten years ago, but there is a post-streetwear era coming.”
A long-term ambition is to make menswear around 35% of Mytheresa’s overall sales. However, Kliger stresses that the more immediate priority is to build a compelling, credible offer. Mytheresa Men’s will need a distinct perspective if it is to carve a slice of the sector, where it will be fighting for space against specialist Mr Porter, as well as existing competitors including Browns and Matchesfashion.
“A potential challenge for Mytheresa is that they are moving into a space that is quite well looked after by Matchesfashion, Mr Porter, Farfetch and the like, who are already doing a good job” explains Nick Paget, senior menswear editor at trend forecaster WGSN. “It makes sense to target a slightly smarter look, because that’s definitely what we’ve seen at [menswear trade show] Pitti Uomo and men’s fashion weeks.”
Kliger argues: “We have a clear view of what we want to do in menswear, and next year we will get feedback from customers as to whether it is right or not. We will see more traction in terms of [international] demand because luxury menswear is even more driven by Asia than womenswear. There’s some strong hypotheses, but we’ll see. What will make us successful is focusing on our positioning. We need to answer the ‘why’ we’re doing menswear very clearly. It’s about making sure customers aren’t saying, ‘Now they also do men’s, but I don’t know why.’”
Once resistant to selling online, fearing it could dilute prestige and exclusivity, high-end brands have woken up to digital possibilities, and stronger own-brand ecommerce platforms from the luxury players could bring more competition for multi-brand retailers such as Mytheresa.
However, Kliger counters that the turning tide can only be beneficial: “Right now, this is the best thing that can happen. Every time a luxury player does a good job online, they give the sector more credibility. The role of the multi-brand retailer is also different – if I know I want the Chloé C bag in turquoise then yes, I might go [directly] to Chloé’s online shop. But if I’m invited to a wedding and I want inspiration for shoes, then I need a multi-brand retailer. Both are relevant.”
Level-headed in the face of increased competition, Kliger admits he is nervious of the challenges he cannot foresee: “I see challenges ahead, but I know we’re prepared. The worst thing is that you always have blind spots – what haven’t we thought about? Who are the three people sitting in a room in [California technology hub] Palo Alto who are developing something that could destroy us in five years?
“What fascinates me about retail is that, at the heart of it, it’s a simple business: offer the product that someone wants at the best price and sell it for more than it cost you. There are millions of decisions that need to be made. It is simple in concept, but the execution can be daunting – I like that.”