Differentiation and consolidation: How LuxExperience aims to become most successful e-commerce player

LuxExperience is on track to establish itself as a leading player in global luxury e-commerce. Following Mytheresa’s acquisition of Yoox Net-a-Porter (YNAP), which was completed on April 23, the newly formed parent company is already the largest provider in terms of company size. However, the group, previously known as MYT Netherlands Parent BV, now faces the enormous challenge of proving that it can run not just one, but several successful luxury e-commerce businesses.

Analysts received an initial insight into how the company intends to approach this ambitious task and the ambitious goals set by chief executive officer (CEO) Michael Klinger during a conference call on Thursday.

LuxExperience targets four billion euros in turnover

At the start of the analyst conference, Klinger made the company’s ambitions clear following the acquisition. LuxExperience is aiming for combined revenues of four billion euros in the medium term, with a return on sales of seven to nine percent. This would give the group an operating profit of over 300 million euros. LuxExperience expects a small positive amount before interest, taxes and amortisation in the financial year 2026/27, before the targeted margin of seven to nine percent is achieved by 2030.

The profitability strategy focuses on consolidating business areas and synergy effects in technology and logistics. Stringent cost control is expected to generate annual savings of around 150 million euros in administrative costs, a key pillar for increasing profitability.

Mytheresa remains the flagship of the group. This is hardly surprising, as the company has significantly outperformed the strained multi-brand retail and e-commerce market, as well as its now acquired competitor Net-a-Porter, in recent years. Despite concerns regarding current trade conflicts, the company announced solid growth for the current financial year on Wednesday. Mytheresa’s revenues rose by 3.8 percent to 242.5 million euros in the third quarter compared to the same period last year.

For Net-a-Porter and Mr.Porter, however, the focus is initially on a comprehensive restructuring. Since 2023, the platforms have been pursuing a “volume-to-value” strategy, which targets higher-margin, high-priced customers. Although this led to a deliberate decline in turnover, it was offset by improved profitability. In the coming years, the platforms are to be put back on a growth course, with the aim of achieving an earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of 7 to 9 percent in the medium term. In the short term, 3 to 6 percent is planned. For the off-price segment with Yoox and The Outnet, LuxExperience continues to expect sales declines in the short term, but is aiming for double-digit growth and an EBITDA margin of seven to nine percent in the long term.

To implement the transformation, LuxExperience plans to invest 200 to 250 million euros in one-off restructuring costs, spread over two to three years. In addition, 150 to 200 million euros are to be used to cover the negative operating cash flow during this period, a total of 450 million euros. However, these expenses will be fully covered by the existing liquidity of around 780 million euros, including unused credit lines.

Cannibalisation or differentiation

However, CEO Klinger is not relying solely on the restructuring and integration of the acquired platforms for the company’s expected success from the merger, but also refers to the considerable growth potential of the global luxury market, particularly in the online sector.

“We have an outstanding market opportunity,” said Klinger. “Digital will continue to grow, and we will benefit disproportionately from it.” Market analysts predict that the global luxury market will grow from around 360 billion dollars to around 480 billion dollars by 2030. The lion’s share of this growth will come from the digital channel. The digital luxury market is expected to more than double in the coming years, from 70 billion dollars today to around 150 billion dollars.

Klinger sees the opportunity not only in the market volume, but also in the group’s unique positioning. “We have extremely valuable assets: strong brands, a global reach and, above all, a top-class customer base, which gives us a unique size in luxury shopping,” the CEO explained.

Size alone does not guarantee success, Klinger clarified. Rather, it is the diversity of the portfolio that gives LuxExperience a decisive advantage, from regional reach to the product mix in the high-price segment. In combination with the ambitious transformation plan, the group sees itself in a unique position to become the most relevant platform in digital luxury retail.

Klinger firmly rejected the concern that has repeatedly arisen since the takeover about a possible cannibalisation of the offerings, particularly between Mytheresa and the acquired platforms Net-a-Porter and Mr Porter. “Are we not cannibalising ourselves? Are we not competing in exactly the same space for exactly the same customers?” the CEO asked rhetorically, before answering himself: “No. Both are luxury, but with a different composition.”

The CEO also used figures to prove the clear separation. Only 9.5 percent of customers and just 8.2 percent of the particularly high-spending customers overlap between Mytheresa and Net-a-Porter and Mr Porter. A similar picture emerges in the off-price segment. Despite a respectable average order value of 274 euros, the off-price business with Yoox and The Outnet is clearly in a different league to the first-price offerings of the other platforms. This is reflected not only in the shopping baskets, but also in the customer base. Of all the customers of the luxury platforms Mytheresa, Net-a-Porter and Mr Porter, only 7.5 percent of customers also shopped at Yoox or The Outnet last year.

According to Klinger, this clear differentiation is a key pillar of LuxExperience’s strategy: “With our various platforms, we are addressing different luxury customers and can thus cover the market more comprehensively under the group’s umbrella,” said the CEO. “That is one of the key reasons why we are convinced that we can develop LuxExperience into the most relevant platform for digital luxury worldwide.”

Consolidation of administrative areas

Despite all this, the company’s ambitious growth and profitability targets cannot be achieved without a fundamental transformation of the group, and Klinger is aware of this: “It is well known that these businesses need to be transformed,” CEO Klinger emphasised in the conference call, making it clear: “We are on the right track, but there is still a lot of work ahead of us.”

LuxExperience is focusing on five central principles in its realignment: strengthening the brands, reducing complexity, optimising the infrastructure, technological consolidation and utilising the comprehensive customer data base. The aim is to establish an operating model that does justice to the different characters of the brands, while at the same time benefiting from synergies on the cost and infrastructure side.

While Mytheresa, Net-a-Porter and Mr Porter will each be managed by independent teams in the future, including separate purchasing, performance marketing, content and personal shopping, central functions such as technology, logistics, human resources or finance will be merged. The off-price platforms, on the other hand, will continue to operate with their own backend infrastructure. “This is a different business model with different margins and requires a different cost structure,” said Klinger.

The group is paying particular attention to optimising the operating infrastructure. By merging the logistics networks and making better use of existing capacities, productivity is to be increased by 20 percent and the costs per customer contact reduced by 30 percent. Klinger also sees potential savings of up to 40 percent in the production of photo content. “These benchmarks are not based on economies of scale, but on the expertise that we as Mytheresa bring to the table,” the CEO clarified.

In the area of technology, LuxExperience is aiming in the long term to migrate Net-a-Porter and Mr Porter to the existing Mytheresa infrastructure. This should not only enable a better user experience, but also reduce technology costs by up to 70 percent.

Another lever lies in the use of the data base. With over four million customers worldwide, LuxExperience claims to have one of the richest data bases in the luxury segment. By making greater use of artificial intelligence and personalised offerings, the group not only wants to increase relevance for customers, but also become even more attractive for brands as partners. “Our data not only offers us deeper insights into luxury shopping behaviour, but also opens up new opportunities for monetisation and increased efficiency,” said Klinger.

The CEO sees the clear separation of brand identities paired with centralised backend structures as the decisive success factor: “Strengthen the brand, give the teams autonomy and responsibility, and at the same time benefit from centralised synergies,” Klinger summarised the basic logic of the transformation plan.