Luxury e-commerce

From boutique to boutique fashion portal: Mytheresa

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Theresa in Munich: If you have to ask, you can’t afford it. Source: Mytheresa

The southern German village of Aschheim is as unlikely a location for haute couture as for high technology. But both have collided in the sleepy Munich suburb to create Mytheresa, an online high-fashion empire that grew out of a simple boutique.

Zalando is bigger in terms of sales but we are more global,” says CEO Michael Kliger, referring to the famous online fashion retailer based in Berlin. The company hawks brands from Acne to Valentino and from Chloé to Prada online to 140 countries with annual sales of over €300 million ($354 million).

The company was founded by Susanne and Christoph Botschen in 1987 as Theresa, a small store in downtown Munich. They went online in 2006, sending packages directly from the store. Now e-commerce accounts for around 95 percent of its sales. Four years ago, the Botschens sold out to Dallas department store Neiman Marcus, allegedly for about €170 million.

Korean, Arabic, Chinese

The new owner ushered in an expansion that included the hiring of Mr. Kliger in 2015 as a new CEO as well as a new a new, 32,000 square-meter (344,500 sq. ft) warehouse and logistics center in neighboring Heimstetten in 2017. Approximately 600 employees come from over 50 countries to offer advice in a customer’s native language whenever possible. The website, too, is in eight languages (including Korean, Arabic and Chinese).

Deliveries of the approximately 200 luxury labels are promised within 72 hours to even the furthest corners of the world. Today, barely 20 percent of the company’s revenue comes from Europe’s biggest economy.

The billion-dollar luxury market is tough, but its unique structure opens holes for the likes of Mytheresa. A few conglomerates such as LVMH and Kering dominate, but niches are filled by creative individuals in an unmanageable number of small family businesses. Their archaic, lethargic business models still rely on pompous shows and big emotions.

Kids’ gloves

“On one hand, we deal with manufacturers in Tuscany where the finest fabrics have been woven for centuries. On the other, we sell our products via smartphones, a sober technical gadget that has only been around for a good 10 years,” Mr. Kliger says. Artificial intelligence is very promising for the company, he says: “We can make much more accurate predictions than ever before about what sizes, colors and shapes will be in demand next year. But then a new designer suddenly starts with a big brand, and gains traction with completely new ideas — and bam!”

And by “bam” he means there is no data for the new idea, and Mytheresa is back guessing what its customers want. Customers and brands alike expect “careful curating.”

Serge Hoffmann, a partner at the consulting firm Bain, says it’s part of a bigger trend. “Many luxury brands have used the internet primarily for their marketing so far, but have not understood it as a sales channel. But online has become one of the most important trends in the luxury market. Platforms for curated assortments that offer different labels with similar brand promises are gaining in importance,” he says.

Mr. Kliger started at McKinsey and worked for Ebay, Accenture and Real before moving to Mytheresa. He would like to “grow even faster, but with our business model that would always mean taking significant risks.” He’s cautious but determined.

This spring, Mytheresa will enter the luxury children’s fashion market. “That makes perfect sense because half of our customers have their own children — and therefore a great interest in kids’ wear,” says Mr. Kliger.

Thomas Tuma is a deputy editor in chief at Handelsblatt. Andrew Bulkeley, an editor at Handelsblatt Global, adapted this article into English. To contact the author: tuma@handelsblatt.com

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