Though still in its early days, the turnaround of LuxExperience is showing signs of progress.
It’s a complicated endeavor necessitated by last spring’s acquisition of Yoox Net-a-porter, a troubled, money-losing business that was comprised of multiple e-commerce websites. Cost reductions, renegotiating contracts with service vendors at better terms, consolidations, some management changes and a sell-off are part of the effort.
Additionally, best practices at Mytheresa — the profitable and growing luxury e-commerce website operated by LuxExperience — are being applied to the Net-a-porter women’s luxury website and Mr Porter men’s luxury website; Yoox, an off-price e-commerce business, is being downsized, and the Outnet off-price website was sold off. Net-a-porter, Mr Porter, Yoox and the Outnet were all part of Yoox Net-a-porter, otherwise known as YNAP.
For Wall Street and the fashion industry, which are carefully watching how LuxExperience performs through this pivotal period, chief executive officer Michael Kliger has a positive message: “The turnaround has started and is really the result of cost cutting. We still have more to go, but already in the second quarter, we achieved a bit of growth and a bit of profitability, which is quite an achievement, since both top and bottom lines were negative in [the first quarter].”
LuxExperience’s stock, which is traded on the New York Stock Exchange, has ranged from $4.48 to $13.30 over the last 52 weeks, and on Wednesday closed at $8.
In an interview with WWD, Kliger discussed what’s involved in the turnaround, the outlook for luxury and why Mytheresa keeps humming along while other fashion e-commerce businesses falter.
LuxExperience bought YNAP from Compagnie Financière Richemont, which provided LuxExperience with 555 million euros, no debt and a 100 million-euro credit facility for Yoox Net-a-porter, in exchange for 33 percent of LuxExperience shares. For reviving Net-a-porter and Mr Porter, “It’s not so much an integration as it is really creating efficiencies by adopting some of the activities and approaches that we have had in Mytheresa for a long time,” Kliger explained. “There are some integration aspects, but a lot of it is applying best practices.”
Two warehouses have closed, leaving three for Net-a-porter and Mr Porter. Photo production facilities in the U.K. and U.S. were consolidated into one studio in Milan. And for further efficiencies and cost savings, third-party customer care providers were reduced from four to one, reducing customer care locations from 13 to four. In addition, LuxExperience renegotiated carrier contracts with UPS, FedEx and DHL, achieving “significant double-digit savings,” across the websites, including Mytheresa.
Changes in technology are happening. “We expect tech migration to be done by the end of calendar year 2027,” Kliger said. “We’re moving Net-a-porter and Mr Porter to our technology at Mytheresa.” By doing that, Kliger expects to reduce tech costs by 65 percent.
He said Yoox is focusing on the European markets, where the business is profitable. Sales declines have primarily been seen in Asia and the U.S. “In Europe, including Germany, Yoox in the company’s fiscal second quarter achieved growth of 13.9 percent in net sales. So we’re really growing the healthy core, which is Europe, and purposely reducing the business in Asia and the U.S., more or less, by 30 percent because of the cost of service. We are focusing on higher margin products. Yoox is still [generating] losses, but the strategy of focusing on the European markets is paying off significantly. It’s a much more profitable market for us.
“The big message here for the Street is that we are fully on track to achieve — as a group — 7 to 9 percent profitability on an adjusted EBITDA basis. And of course, become a 4 billion-euro company within the next five or six years. This is fully backed up by what we see happening now at the company. We were very happy with the second quarter, and we feel fully vindicated the turnaround is starting to work, and we will continue to improve the businesses in [third] and [fourth quarters].”
In the company’s second fiscal quarter, which ended Dec. 31, positive adjusted EBITDA came to 13.2 million euros with an adjusted EBITDA margin of 2 percent, versus minus 5 percent in the first quarter. Net income from continuing operations was minus 12.6 million euros for the second quarter. Net sales increased 1.1 percent, or 6 percent on a constant currency basis, to 645.1 million euros, from 638 million euros in the prior-year quarter.
Mytheresa had a strong quarter with 9.9 percent GMV, or gross merchandise value, growth to 268.9 million euros and 12.7 percent growth at constant currency. Mytheresa achieved adjusted EBITDA margin of 9.3 percent, or 23 million euros, compared to 16 million euros in the year-ago quarter.
At Net-a-porter and Mr Porter combined, GMV declined 1.9 percent, which Kliger characterized as “a great improvement over the previous quarter where we were minus 10.8 percent.” The adjusted EBITDA came to minus 1.9 million euros, or minus 0.7 percent adjusted EBITDA margin.
At Yoox, GMV declined 12.1 percent in the second quarter, but that’s an improvement over the 19.3 percent drop in the first quarter, suggesting some sequential improvement.
SGA at the former YNAP was 2.5 times higher than Mytheresa’s. “We are attacking it — quarter by quarter,” Kliger said. “But the story is really focused on better-quality customers really building long-term relationships, and then taking out cost in the back end, across the board, where the customer doesn’t feel it.
“The turnaround is starting to work, and we will continue to improve the businesses in [the third] and [fourth quarters],” Kliger said. “A lot of the things we are doing have not fully kicked in yet.”
He said LuxExperience is “well endowed” with cash and is debt free. “We use that cash to do the heavy lifting and also to build up working capital and pay our suppliers.”
Asked for his outlook on the luxury sector in 2026, Kliger said, “I actually expect a solid ’26 unless we have significant macro hits. There is opportunity in this market.”
Before the acquisition, Kliger was CEO of Mytheresa for more than a decade, growing the business from 99 million euros in early 2015, to 988.5 million euros in fiscal 2025.
“We built the Mytheresa business on certain principles of curation, experiences and high-quality service,” Kliger said. “We believe at Mytheresa, we understand the secret sauce for profitable digital businesses, and we are applying what we learned to Net-a-porter and Mr Porter, and we can see early signs of success. It’s really about building long-term relationships with brands and with customers, and not going for short-term gains.
“I think this is paying off. We know how to have sustainable, profitable growth in digital,” regardless of whether the sector is caught up in difficult times, as it is now, or in buoyant times. “It doesn’t matter. In the digital world, we are the one global partner for luxury brands that is reliable and has a sustainable business model,” Kliger stated.
LuxExperience operates three luxury e-commerce websites, but Kliger explained why each has its own raison d’être.
“When we look at the customer base, Mytheresa serves a customer that knows what they like,” Kliger observed. Within Mytheresa’s relatively limited offer of 250 brands, “customers want to see newness in the top brands they love. They actually are not looking for editorial advice. They love Prada. They love Bottega Veneta.” Among the other luxury brands selling well and growing at Mytheresa, Kliger cited The Row, Saint Laurent, Alaïa and Loewe, to name a few.
“The Net-a-porter customer,” Kliger added, “is traditionally very interested in brand discovery, so a broader portfolio serves their needs. Show them the new brands they haven’t heard about. That’s also why the editorial approach at both Net-a-porter and Mr Porter is so attuned with that customer, because they want to hear what is so cool about this new brand they never heard about. Where is it coming from?”
Compared to Mytheresa shoppers, Net-a-porter shoppers are more open to new brands and more willing to adopt changes in creative direction, Kliger said. “Net-a-porter will continue to be a broader portfolio of luxury brands. It also has contemporary brands, but it’s elevated contemporary.”
The Net-a-porter DNA reflects its origins, being born in London, historically more of an incubator for fashion forward, trendier design compared to other parts of Europe. Mytheresa, founded in Munich, has a highly curated assortment of about 250 ultra luxury brands.
Interestingly, Net-a-porter has a broader assortment. The website’s average basket size is 800 euros, which is similar to Mytheresa’s, so selling a wider range with some lower price points doesn’t necessarily lead to spending less per visit, Kliger noted.
“The purpose of the whole LuxExperience group is to serve different customers with these different [digital] stores that do not overlap. They’re positioned differently. And we check regularly on sku [stock keeping unit] overlap. Seventy-five percent of the skus are different.”
The websites might display many of the same designer brands, such as Gucci, for example. But in those cases, the collections are edited differently. “That’s why I insisted on having different buying teams,” post acquisition, Kliger said. “When they go into the showrooms, they have a certain customer in mind, and surprise, surprise, what comes out? Different selections. Net-a-porter has its showroom appointments. Mytheresa has its showroom appointments, and we have told the brands to treat them as separate accounts.
“We believe, based on the decade of success at Mytheresa, that you need to stand for something, and that you need to communicate that. And so you need very sharp marketing, sharp selection, curation. You need to be willing to take a position.
“You still hear from people in New York City talking about Barneys and remembering that the store always had brands no one else had. They took a position, they curated it — and that’s what we do in digital. People say in digital you can carry everything, but then you don’t stand for anything.”
It will take some time for LuxExperience to complete its turnaround and before ever considering another acquisition. “Before we acquired YNAP we were about 980 million euros at Mytheresa and now we are 2.7 billion euros combined. That was a big, big step. But we are very comfortable, and we want to do this properly again. We know, at least confirmed by the 10 years of success we had at Mytheresa, that we know what we should apply to Net-a-porter and Mr Porter,” Kliger said.
Asked if Mytheresa has been capturing business from Saks Global, which filed for Chapter 11 bankruptcy reorganization last January, Kliger replied, “Well, I can’t tell you for sure because we don’t ask customers where have you been spending before? But I think it’s a safe assumption you made.”
