What's Happening?
LuxExperience, a Munich-based digital luxury group, reported a decline in its first fiscal quarter's gross merchandise value (GMV) by 4.3% to 589 million euros. Despite this, the company exceeded expectations
due to strong performance from its Mytheresa segment, which saw a GMV growth of 13.5% and net sales growth of 12.2%. The company has been working on turning around its Net-a-porter, Mr Porter, and off-price segments, which have been underperforming. LuxExperience recently acquired Yoox Net-a-porter (YNAP) from Compagnie Financiere Richemont, receiving 555 million euros in cash. The company also plans to sell the assets of The Outnet, classifying it as a discontinued operation. LuxExperience has raised its fiscal year guidance, expecting GMV between 2.4 billion and 2.7 billion euros, reflecting a growth range of minus 7% to plus 2%.
Why It's Important?
The performance of LuxExperience is significant as it highlights the resilience and strategic shifts within the luxury retail sector, particularly in the digital space. The company's ability to exceed expectations despite a decline in GMV underscores the importance of focusing on high-value customers and optimizing operational efficiencies. The acquisition of YNAP and the planned sale of The Outnet indicate a strategic realignment aimed at strengthening core operations and improving profitability. This development is crucial for stakeholders, including investors and competitors, as it reflects broader trends in the luxury market, such as the increasing importance of digital platforms and the need for operational agility.
What's Next?
LuxExperience anticipates a solid holiday season, with expectations of continued growth in the Mytheresa segment and a turnaround in the Net-a-porter and Mr Porter segments. The company aims for these segments to break even by fiscal year 2027. The focus will be on reducing costs and complexity, particularly in IT and operations, to achieve profitability. The U.S. market remains strong, and Europe shows stable growth, while Asia is expected to stabilize at a low level. The completion of The Outnet sale in the first calendar quarter of next year will further streamline operations and potentially enhance financial performance.
