Mytheresa, based in Munich, went public in the U.S. in late January, raising about US$350 million for the company.
4 min
Bricks-and-mortar fashion boutiques have been in a tough spot during the pandemic. Small stores, after all, aren’t set up for social distance. Online retailer Mytheresa has been able to fill the void. The website caters to wealthy shoppers looking for help in finding their next designer handbag, pair of shoes, clothing item, or accessory.
Mytheresa, based in Munich, went public in the U.S. in late January, raising about US$350 million for the company. The listing grew out of the bankruptcy of Neiman Marcus, which purchased Mytheresa in 2014. The small-cap has a market value of about $2.2 billion.
Mytheresa stock (ticker: MYTE)—technically an American depositary share of parent company MYT Netherlands Parent—was recently trading just below its $26 initial-public-offering price after having jumped to $36 shortly after the debut. The stock could recover those losses and more in the coming months.
“They are at the intersection of two higher-than-average growth trends in retail: luxury and e-commerce,” says J.P. Morgan analyst Matthew Boss.
Luxury buyers have been slower to adopt e-commerce. Before the Covid-19 pandemic, some 12% of global luxury sales happened online, compared with a 20% share of overall retail. The gap is closing. A recent study by consultancy Bain estimates that the share of luxury goods sold online could nearly triple to more than 30% by 2025.
Meanwhile, the overall luxury market is growing by about 7% annually.
The tailwinds put Mytheresa in an enviable position, and the company should get a further boost from its expansion in the U.S. and China, which are currently just 10% of sales each. (Europe was 60% in its latest fiscal year.) The company now has collections for men and kids, and it could expand into categories like jewellery and furniture in the future.
Mytheresa isn’t your typical money-losing tech start-up. The company, which reports in euros, earned €6.4 million ($9.9 million) in its latest fiscal year on €449 million in revenue.
Sales have grown an average of 22% over the past two fiscal years, while adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, have grown at a 30% clip. For the fiscal year that ends in June, analysts are forecasting revenue growth of 25%, to €560 million. Analysts, who track adjusted earnings, expect the company to make €30.4 million this year, up about 60% from the adjusted figure last year.
“We are dealing with high-net-worth individuals who like to spend money—that’s a great customer base, and our core asset is this customer,” says Mytheresa CEO Michael Kliger.
The customer focus has helped the company earn a consistent profit, with a gross profit margin of about 45% and an adjusted Ebitda margin of about 8%. Other e-commerce players at Mytheresa’s early stage of growth have been years away from turning a profit.
If Amazon.com is the “Everything Store,” Mytheresa has taken the opposite approach. The site carries about 200 brands, fewer than luxury e-commerce rivals Farfetch (FTCH) or Richemont’s (CFRUY) Net-a-Porter. A recent search for “black dress” on Mytheresa’s U.S. site yielded just over 2,000 results, versus more than 7,000 at Farfetch.
Mytheresa’s most loyal shoppers get access to personal shoppers, styling and concierge services, and other perks like invitations to exclusive designer events and parties.
CEO Kliger says there’s a fine balance between presenting products in a way that’s helpful to shoppers and overwhelming them with an endless assortment. His company is focused on curation and more-abstract shopping desires, he tells Barron’s.
Customers looking for a specific Burberry coat, Chloé handbag, or pair of Gucci sneakers are better served buying directly from the designer.
Mytheresa’s website and app, now set up for spring and summer, are currently promoting multibrand compilations including “sandal season” and “talking-point pieces.”
The unique edit, to use the fashion-industry parlance, stands out to customers. Some 90% of Mytheresa customers surveyed by Cowen analyst Oliver Chen said they were likely to recommend the site to a friend, and 75% of them browse it weekly. Nearly 50% of Mytheresa’s customers spend at least $30,000 on luxury goods annually, the survey found.
Investors have been far more stingy when it comes to Mytheresa stock. The shares trade for 2.8 times this year’s estimated sales, versus 8.2 times for Farfetch and 4.5 times for The RealReal (REAL)—both of which are losing money.
Mytheresa could rally as investors reconsider that valuation gap. J.P. Morgan’s Boss has a price target of $38 on the stock, 50% above its recent close.
For now, Mytheresa stock is a luxury play at a bargain price. The sale is unlikely to last.
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As millions flock to GLP-1s, doctors warn the drugs can cause rapid and significant muscle loss.
5 min
Chanel Robinson achieved exactly what the gold rush of blockbuster weight-loss drugs promised: She lost nearly 100 pounds, lowered her cholesterol to normal levels and reined in her polycystic ovary syndrome.
Yet, nearly three years into her journey on Mounjaro, the 30-year-old from Atlanta, Ga., is discovering the hidden costs of the slimmed-down life.
Robinson experiences muscle fatigue daily, feeling physically weak, frail and often cold. Robinson said she experiences bursts of sluggishness sporadically during the day, and has trouble with basic tasks like opening a jar. “It shouldn’t be this difficult,” she said.
GLP-1 drugs like Ozempic, Mounjaro and Zepbound have been a success for public health and the pharmaceutical companies that make them. Obesity rates are falling, the volume of food consumed in America is declining and retailers report a slump in sales of plus-size apparel. It has improved health and happiness for millions of people.
But for at least some of the 13 million Americans taking them, losing muscle along with fat is an unexpected downside that isn’t broadly discussed or immediately apparent.
The drugs can cause rapid and significant loss of lean muscle mass, up to 10%, comparable to a decade or more of aging, according to an analysis published by the American Diabetes Association.
The loss of lean tissue is similar to weight loss from dieting, but the magnitude over a short period can lead to frailty, instability and lack of coordination, doctors and researchers say. Another concern is that losing muscle could slow down patients’ metabolism, leading to weight regain.
“We are curing obesity by encouraging frailty,” said Daniel Green, principal research fellow at the University of Western Australia, who contributed to the analysis. Many taking weight-loss medications initially lose fat and feel great, but quickly start to feel weak and lethargic, he said.
Green’s research showed that the rate of muscle loss could be slowed significantly by regular strength workouts. “It should say ‘must be taken with resistance training’ on the box,” he said.
Drugmakers say weight-loss drugs should be taken only on the advice of a physician and as part of a long-term plan that includes diet and exercise.
A spokesperson for Eli Lilly, maker of Zepbound, said Food and Drug Administration guidelines say it should be used “with increased physical activity.” The spokesperson added: “Sustainable weight loss is about more than a number on a scale.”
Both Eli Lilly and Novo Nordisk said clinical trials showed users did lose some lean muscle tissue, though at far lower rates than fat. Liz Skrbkova, a spokeswoman for Novo Nordisk, said that trials for its drug Wegovy showed changes in muscle mass didn’t “significantly differ” from patients who took a placebo. Eli Lilly said users lost three times more fat weight than lean tissue.
Rayna Kingston, 30, from Denver, said her injections of Zepbound left her feeling so tired the following day that she struggled to complete anything other than basic tasks. She said she shifted her dose to a Sunday because Mondays were her least busy day. Her partner would bring her meals in bed because she felt so weak.
She stopped exercising, and said her doctor didn’t give her any guidance on strength training or muscle maintenance. “I was relying on Reddit forums to understand what was happening to my body,” she said. She got so frustrated with the fatigue she came off the medication just under two months later.
Experts say that losing muscle at such a rate can be especially dangerous for those over 50 or with osteoporosis or limited mobility as it could lead to an increased risk of injury. “Loss of muscle mass is detrimental to moving around and quality of life, but it is also not safe,” said Katsu Funai, associate professor at the University of Utah.
Elderly Americans are set to be able to get GLP-1s from Medicare from July.
There is also pushback from doctors and regulators against using weight-loss drugs as a “quick fix” to lose a bit of weight.
People who take GLP-1s regain weight four times faster than those who lose weight through lifestyle interventions, and weight regained is often mostly fat, according to a recent analysis published in the British Medical Journal. There currently are few, if any, guidelines or studies on de-prescribing the drugs, researchers say.
The nurse practitioner who prescribed Robinson the medication didn’t warn her that resistance training is essential to maintaining muscle mass, Robinson said. She said she regrets not exercising and now does Pilates once a week.
In the haste to disrupt the obesity epidemic, weight loss has been treated as the singular, undisputed metric of success, which experts say is problematic.
“People worship body weight as an outcome measure because it’s simple, quick and inexpensive,” said Green. “But what matters is fat and muscle mass, which is more expensive to measure as it requires an MRI.”
Grace Parkin, 34, a property manager from Sheffield, England, has lost 125 pounds after she started taking Mounjaro in 2024. “I don’t care about my muscle mass as long as I’m a healthy weight,” she said.
The doctor who prescribed the drug didn’t tell her to exercise, though the pharmacy that sold the medication gave her information on exercise and protein intake, she said.
She didn’t exercise and said she soon felt side effects: a “deathly cold, from the inside” likely because of the drug. Still, she vowed to keep going, saying the weight loss was worth it.
In response to some of the side effects, drug companies are hoping to develop weight-loss treatments aimed at preserving or even building lean muscle mass.
German drugmaker Boehringer Ingelheim recently said it had promising results from one such drug. Eli Lilly last September halted a trial of a similar drug.
While weight-loss medications are designed as lifelong treatments for chronic diseases, namely obesity and Type 2 diabetes, they are increasingly marketed as lifestyle fixes.
Tennis superstar Serena Williams, who used GLP-1s to slim down after having children, was featured in this year’s Super Bowl commercial promoting telehealth company Ro’s weight-loss medication.
Serena Williams poses for an ad campaign for a weight-loss drug. Ro/Handout/Reuters
Women may be particularly vulnerable to the drugs’s side effects, which can also include nausea, diarrhea, migraines and rarer cases of pancreatitis.
A study last year from a university hospital in Turin, Italy, showed that women are more prone to adverse reactions to weight-loss drugs than men, including muscle loss.
Green, the researcher, said the issue is of particular concern to those taking GLP-1s recreationally and who don’t have much muscle mass to begin with. Others say a lack of oversight is compounding the issue.
“Patients are self-reporting, and telehealth companies don’t have the patient in front of them to conduct a proper medical assessment,” said Rupal Mathur, an internist in Houston whose practice specializes in weight loss.
She said medical spas are prescribing off-label drugs that don’t meet the criteria set out by the FDA that justify a prescription.
The number of people taking weight-loss drugs who are not living with obesity or Type 2 diabetes is difficult to track since it is unregulated.
However, an analysis by the FDA from 2023 found that more than half of new Ozempic and Mounjaro users didn’t have Type 2 diabetes.
Scientists are calling for more clinical trials to pin down the full effects of weight-loss drugs on muscle loss in different demographics.
“The only studies that have been done have looked at people living with obesity or Type 2 diabetes,” said Green. “That makes it all the more concerning for those using weight-loss drugs in an ad hoc or unregistered way.”
