Conference Transcript - LUXE 2026-09-14

Aaron, Analyst — Goldman Sachs

uh well welcome everyone to the global consumer and retail conference uh this is the 33rd uh edition it's the first one for me i've only been at goldman tax for a month and a half um i have been involved in luxury for the better part of the last 30 years but i don't have coverage yet eventually hopefully i'll be covering uh european luxury out of london i'm very happy today to uh welcome martin bear who's the cfo of lux experience uh formerly known as my theresa But obviously, the group has expanded a year and a half ago to take over other assets, selling luxury online and becoming, according to some, the sort of last man standing in that approach. just to start off Martin and thanks a lot for making it here I just was wondering if you could give us maybe your vision about where we are at in luxury today because I think from what I've started picking up starting to you know speak to the companies that eventually I'll be picking up I understand that the US continues to compound quite nicely South Korea is very strong the rest of the markets seem relatively weak so that's from a I guess a regional point of view if you look at brands seemingly Chanel is doing very well seemingly a lot of the jewelers global jewelers the likes of you know Tiffany Cartier etc are doing very well but the rest of the brands are relatively weak I'm wondering what you're seeing you know how what is your vision of the current state of luxury and maybe recent changes in consumer behavior what are you're experiencing at Lux Experience?

Martin Beer, CFO

Thanks, Aaron. Good to be here, to see you, and very big question, but obviously, you know, it's a key question that everybody's looking at. What is the state of the luxury consumer, and what are the nuances, and maybe you can answer that from two angles. First angle is more the broader angle, the digital luxury. I mean, we all have to bear mind that the luxury market 400 billion the digital part is the part that is growing and if you take the pain after gamma or whatever the the digital part is it's going 8 to 10 percent CAGR per year so as a digital player we operate in a market that has a lot of tailwind from the market operating in a growing market and that obviously is also you have to bear that in mind that you know Digital luxury always has been the best growth opportunity on a more general level, especially if you look at brands that you also mentioned that rely on physical stores, be it in China or Middle East, and obviously have to face certain acts. And the second topic, the second angle is the top customer, the top customer. So everybody is trying to grasp the K-shaped situation where brands succeed more to the higher end of the top customers and brands more lower have less success. And this top customer is really very demanding. It requires innovation. It's about emotions. It's about curation. And with that, defines fashion and luxury as part of the lifestyle. And therefore, is a much more resilient customer. And we see that also in our numbers. I mean, the last quarters you've seen that we, at Maitresa, double-digit growth in the last quarters. and because we've always focused on that top customer, that high-end customer. And if you look at more bigger brands, they are to a certain degree and more back-selling companies and therefore have a much higher share of aspirational customers per definition. And with that top customer focus, that enables us to continue to grow and to have a very resilient business model. As you mentioned in the last quarters, the number of top customers increased double-digit, very strong. Revenue per top customer increased. All the KPIs, AOV, or with that top customer notion, higher full-price share. And therefore, that is also kind of the logic or that results in why we have such a good and strong business model on the top customer side. So for us, it's a very stable, resilient top customer cohort. And for us as a multi-brand player, and that top customer is per definition a multi-brand customer because you can't just buy for two years now only Gucci or something. You usually don't do this. and that caters and that helps us as a multi-brand luxury player and we are the number one in the world and can therefore sustain that positioning towards a top customer. And maybe last word, it's also we can grow with the successful brands and can defocus, de-scope more the unsuccessful brands. So we are in that ideal situation of being a multi-brand digital luxury player. And also from an investment perspective, and I think that's why you are all here, it's also, I think, a good space if you want to invest in the luxury industry. We are kind of a more actively managed luxury ETF, so to say, because we can balance the effects. And so for us, to answer your question a bit longer, the customer state is very differentiated. And we can talk about geographies, but on the top customer side, it's a very high resilience. And it has always been. And you mentioned U.S. I mean, in the last quarters, we grew U.S. 20%, plus 20%, 25%, 30%. That shows you that also, in addition to the top customer focus, we're a bit detached from an overall, how does the overall luxury customer develops?

Aaron, Analyst — Goldman Sachs

Right. So you've explained well how maybe the underlying trends in luxury are relatively muted, but your part of the business is growing 8% to 10% in aggregate. But you've seen quite a bit of change in your environment with, you know, I was mentioning your position as being the sort of last man standing. you've had a lot of changes not just with the you know the evolution of sax.com and what is now called the exemplar group which is actually with us today as well but can you maybe explain how your ecosystem of multi-brand selling online of luxury has changed and how you can benefit from recent changes I mean the The overall story of my Teresa before La Cisperia was always intact, always double-digit growth and strong profitability with a focus on this high-end, this top customer.

Martin Beer, CFO

And with that, we have two key ingredients that you need to have to be successful, which is a very high, very loyal customer base, top customer that comes back, not just because of discounts or marketing efforts. and with that positioning a very high AOV I mean we have more than 800 euros AOV and that helps you on the unit economics and that translates into a very profitable business model on the overall market side yeah you mentioned that we are now the undistributed number one global multi-brand digital luxury player, and that helped, obviously, with Farfetch, Matches, Essence, Luisa Villaroma, and also the new situation on SACS. That helped on the competition side as we see the brands really focus on us and want to grow with us as we, K2, so that multi-brand luxury customer with a lower view on discounts and with with really understanding what the customer wants and have a very high quality experience we have the highest net promoter score in the industry over 80% and this top customer you always have to bear in mind is very demanding if you not only look at curation but also if you look at

Aaron, Analyst — Goldman Sachs

operational execution and quality okay so you talked about the compounding nature of growth in the U.S. I've always had this idea that the U.S. was a fast-growing market for luxury but a quite expensive one. The cost of doing business seems to be pretty high here. So I'm wondering if you can compare and contrast the future potential of the U.S. for your business relative to other regions. I think, surprisingly, the Middle East was a highlight from last quarter. If you project the next few quarters, and I know you're publishing in today, so I'm not asking you about now, but more long-term, where do you see incremental growth coming from, and are there real differences in terms of economics if you're dealing with maybe some remote parts of Europe, like going into Eastern Europe or, you know, into countries where maybe the brands don't have a physical presence and you can help them out, or parts of Asia, or, you know, if you can compare and contrast the potential, but also the economics of the different regions.

Martin Beer, CFO

Yeah, to answer that, the overall economics, if you look at gross margin, price levels, gross margin, then operational like shipping and payment costs and so on, is very comparable if you look at different parts of the world. And this is our key benefit. We deliver to 133 countries without having the need for a facility, for logistics set up in that country. So we can always shift and balance. Also, ETF, we can balance certain countries where we see, yes, there's great growth. And then looking at the geographies for us, you rightly mentioned that U.S. has always been a strong growth market. And I think for the last two years, three years, always double-digit growth, independent of Ukraine, Iran, Middle East situations. U.S. has always been a top growth market and will stay for us a top growth market, double-digit Kegers. That is key for us. China is difficult, remains difficult for us as a mini part, thank God. But there are other growth spots in APAC. If you look at Singapore, Taiwan, Korea, you mentioned, very strong growth there. And Europe has always also been a growth story for us. And Europe is not Europe. As you know, there's so many complex countries. And so, I mean, every quarter, if I look at the revenue performance by country, there's high dynamics. And right now, I mean, very strong growth. Cyprus, Greece, Bulgaria, Romania, but also Italy, Spain, Portugal. Well, you mentioned, rightfully mentioned that a lot of them are like retail deserts. And therefore, we come into play and conserve at home, being a digital player. And so for us, there's growth all over the world, especially if you look at the TAM, the market size, and our market share, which is still tiny. We're still tiny. Also in the U.S., we're still tiny. And therefore, it's really good, a balanced growth. As you know, the overall wealth in the world is increasing, and luxury enthusiasts also in the world are increasing, which is good.

Aaron, Analyst — Goldman Sachs

I was wondering if we can talk a bit about categories. I might be under the influence a bit because I used to work at Cartier when I was young. But I've read quite a few articles around MyTheresa signing up a few jewelry brands, And I'm wondering, you know, where do you go with this? How do you assess the potential of that new category? And then obviously beyond jewelry, do you have any obvious gaps in terms of product categories that you'd love to serve your target consumer with eventually? Of course.

Martin Beer, CFO

I mean, it all has to fit to the core Maitreys and Net-A-Pot-A-Mist-A-Porter brand. But fine jewelry obviously is a key growth area for us. We have signed on a couple of high-caliber brands Brands, and you saw from there, and you mentioned earlier, from the Richemont brands, I mean, Pine Jewelry or whatever, there's a lot of brands that really perform well and that we want to grow with. So you're right, with us, very much focus on the ready-to-wear section, less bags and accessories and shoes. We want to grow that segment significantly, and this is also a key growth driver. and on unit economics it also helps with a high AOV with a high price so definitely more to hear from that which brands we are getting on board and fine jewelry is obviously catering exactly to our top customer cohorts that we want to focus on we had at MyTreeza added menswear Mr. Porter, very strong, very successful kidswear and and obviously on category side you can think of all the the luxury categories that that for example LVMH has a luxury experiences and so on to to add to that but it has to from an end-to-end perspective has to work and has to have a clear reason why now my trees and everybody is also selling that and and that cannot be an artificial add-on so we really have to think about how to focus and how to go about that. But you're right, the overall growth perspective is very strong. The market is growing. We're increasing market share. Every month we are gaining market share in the core segment that we have.

Aaron, Analyst — Goldman Sachs

Women's wear. And already with fine jewelry, men's wear, kids, where we have growth categories, we can grow geographical. exactly I mean Lex experience will continue to be a growth stock definitely okay thank you you talked a lot about AOV and I was wondering if you could dig a bit further to for me to understand is AOV progressing because you're seeing consumers trade up within the purchases or are you seeing more a case of maybe higher units per order how do you you know how do you track AOV and how do you think it develops in the future yeah I mean you

Martin Beer, CFO

rightfully mentioned in the last quarters we reported very strong AOV growth 7% 12% 13% which is just great helps on the unit economics and the key driver of the AOE growth is a shift in the customers so as you've seen we focus more and more on top customers so the share of the top customers and the revenue share of top customers increases and they buy higher priced items so this is the core driver is not that no not that every customer buys now higher price items but it's the mix effect of if you have a higher share of top customers then obviously your AOV increases because with the ink with a higher share of top customers also my full price share increases because the top customers are less discount so and obviously if you have less discount you have a higher you have a higher full price so top customer higher full price share more AIV as we call it and but we also see a bit more items per order yeah okay that So on all fronts, it might come also with the lack of competition and different market environments. Again, we're happy. We can grow items for order. We can increase the higher-priced items more tuned towards the top customers. Okay.

Aaron, Analyst — Goldman Sachs

So I think naturally, as higher-end customers account for a bigger part of your business, you have a lower level of discount. But overall, I think there's been a sort of conscious decision to get rid of discount more than in the past. And I'm just wondering, how do you balance that? Because what is the type of – not necessarily for the very high-end consumers, but more for entry consumers. what is the trade-off between the traffic that you might generate by discounting a bit more and keeping a very tight ship and being very disciplined? That's, I think, a recent evolution in the model that you've consciously decided to be less discount-driven. Is there a lot of sensitivity? I mean, we've always, I mean, everybody tries.

Martin Beer, CFO

I mean, on every PowerPoint slide you always see, yes, get more top customers and do less discounts. so everybody obviously wants to follow that route and and my Teresa and like it's been always has has been on that route for top customers obviously in the post-corona phase where every brand grew the whole market grew so everybody grows and then obviously the total customer number of total customers increase with us as well but but our focus on top customers you mentioned the IPO earlier 21 I think we reported two and a half three percent of our customers make you know 25 30 percent of our business of our revenues that has increased significantly throughout the years the last six seven years over now over 4 percent make over 40 percent of the revenue so has always been a a top customer a top customer focus but you're also right that the discount level in the industry has decreased significantly in I think a lot of people still remember the 23 situation when there was too much inventory in the market there was some some disruption that caused everybody to have bad numbers and also led to the fallout of a lot of competitors that could not deal with that that situation has completely changed. So the competitive situation, the market situation, also from the brand themselves, have changed significantly. So there's much less inventory in the market, much less need for discount or ability to discount. Even if some local competitors are really aggressive and do minus 20, minus 30%, they don't have the merchandise to do it. So the effect is much less felt. So compared to two, three years ago, the situation of the industry, the situation of the market is much better on the discounting logic. And for us, it was never a logic, should I discount a bit more to attract more customers? Because you saw also in the last quarters, our active customer base decreased a bit even because our currency is the top customers. the top customer share this is our KPI not the overall total customers as it's always a mix aspirational customers standard customers top customers so there's no change in strategy no no no discipline but 23 was a special situation and from that we had to really focus on or continue our focus on being well disciplined and and let's see it's a self-reinforcing wheel because then And also the brands look at us and say, this is a great partner. Because you really understand and you care for protecting our brand equity. And you are a great partner because you also have those customers that we actually would love to talk to. We know it's a multi-brand customer. We know the customer doesn't go through all the stores, just doesn't have time. and therefore you help us to have the digital visibility towards that customer and therefore the collaboration with the brands increased strongly in the last two years be it events, be it exclusives be it early deliveries So they're more willing to Yes, more willing They see us as a key partner Obviously they always also want to focus on their T2C and strengthen their channels but they know that this will never solve for a hundred percent right they're always so always need a a strong wholesale part not that they have now like a 50% interest in wholesale partnership but but more on it's an addition you know some people have like 60 70 percent of D2C and some will have 70 80 percent of their own TTC but it's a great avenue for them to grow and to also speak to that multi-brand multi-brand customer and so conceptually if if you project the next three four years imagining that the algorithm of growth is let's say 10% like low double digit within that growth

Aaron, Analyst — Goldman Sachs

is it fair to assume that the bulk of that growth will come from you being able to sell more to an existing cohort, or is there an important part of recruitment within that 10% growth?

Martin Beer, CFO

It is always new customers. The strong focus is on new customers. It has always been, as we have been coming from very small days, but it's not the overall number of customers that counts. So it could be that the total number of customers goes down, but the value of a customer, the quality of it. Yeah, high potential customer, top customer that comes with a higher AOV or higher revenue per year is then the key. But nevertheless, our focus is still to win that customer, not to have – look at our total customer base. I mean, if I look at the total customer – total U.S. top customers, it's tiny. So we have to grow the number, but we're happy that – and we report on this KPI that the revenue per top customer also increases. So we're not diluting any definition of top customer or how we treat our top customers, but the growth will more come from the number of top customers, in my view. Obviously, revenue per top customer is a key item. We have to grow. The digital logic is helping because every top luxury customer they buy everywhere, they buy offline, they buy online. But with an increasing online share, we benefit. And therefore, obviously, also revenue per top customer will increase. You mentioned fine jewelry. Therefore, also revenue per top customer will increase. So it's both.

Aaron, Analyst — Goldman Sachs

It's both effects, but it's a nice focus area, but a bit higher on the number on top customers and it has always been that way okay so imagining I'm a newbie to the story which is close to being correct just taking a step back if you look at the different assets I think you know I don't shop luxury much and I don't shop luxury online virtually at all but how would you describe the difference between your different assets I you know because there's always a fear that maybe you have a lot of overlap you know if I if I look at my Teresa versus Mr. Porter how do you ensure that the positioning is quite distinct and that you don't basically have a client that basically goes from one to the other and that sort of limits the pool of recruitment is it a regional difference is it a positioning difference is it a curation difference? How do you segment your different assets?

Martin Beer, CFO

Very important question because obviously with the acquisition, we exactly asked ourselves that question. Because if you don't see any value in the asset or just want to make a little bit of a Maitreza out of Net-A-Porter, then this is the wrong way. So we did a lot of commercial diligence, looked at the customer cohorts, and what we found was quite interesting that the customer overlap actually is very low it's it's 10% and you can argue well then I'm that far apart so from a customer perspective the the brands are different at the party mr. Porter more fashion oriented more not higher number of brands at my choice we have 250 natter party mr. Porter 550 newer brands higher brand fluctuation more newness for my trees as more established luxury okay and therefore for multiple aspects it is different it was always different different very small brand or a customer overlap and we obviously want to protect that and therefore we had set up complete different commercial teams different to other competitors how they act so we have different brand leadership and clear separation of marketing and buying so it's not like one big buying group that on Tuesdays buys for my trees and what Fridays buy for metaporte this will not work so they have to compete they really have to go about differently and I'm thinking exactly about the question that you asked on what is the brand equity how do why do the customer why does a customer come to another party versus my trees and when and so on and this this is a key focus for us to keep it really separate but obviously in the back end to to have them the synergy the classic synergies that we that we need and have to achieve on on IT especially on operations finance HR all the other topics that you that you can have in the back end but front and strong different commercial leadership different marketing different buying okay and so my understanding is if you look at the group and the different assets my Teresa is sort of a benchmark I guess in terms of

Aaron, Analyst — Goldman Sachs

profitability and the others are lagging and I suspect part of the investment case if you know if you want to buy into the story is the other assets catching up and I'm just wondering how you how does that happen when does it happen what do you need to put in place to you know show the market that actually the the my Teresa type of margin can be the margin that eventually the group gets to yeah no this is also I mean core core focus area that we had from the beginning also when in I think in May last year 25 we communicated our roadmap our plan how to increase the value of the overall group, and obviously, and that, Mr. P., and Ukes, highly unprofitable.

Martin Beer, CFO

Mitresa, increasing profitability. And therefore, the last quarters, we were able to show a sustained increase of profitability at Mitresa, because also at Mitresa, we're not there yet at the 7% to 9%. but the clear guidance of my Teresa was there for this fiscal year which ended in June to be around 6% so we're almost there we need to grow there more which is fine and NAPS2P different to UQS UQS off-price business, different operational setup, different business model NAPS2P we always guided that this fiscal year 26 is kind of a break-even year, and then fiscal year 27 is also profitable for NEMS to pay. Not at the Maitreza level. This will then be more achieved in the next years. But if you look at the underlying fundamentals of Net-A-Porter and Mr. Porter on, for example, their top customer share, very comparable to Maitreza, their gross profit margin, very healthy. what they're lacking is operations and IT right and which is the more difficult part but the good thing is not the commercial part and therefore you know how difficult is to change the IT setup and that's why we always guide and report on how far are we with the IT and operations and it's in the in the in the P&L it's reflected in the SG&A cost ratio and therefore clearly on the scrutinized guidance to report always increasing performance or lower SG&A cost ratio to get the profitability up. So it's in the back end to come up to the profitability level of MyTresa and there's no reason why Mr. Porter should not be at the same profitability level at MyTresa. It's the same because all the intrinsics are fully intact. UX is a more lower AOV, lower cost margin type of offline business, even more restructuring to be done. That's why we guided UX will be profitable in fiscal year 28, also complete new setup of warehouses, of operational model, focusing on Europe instead of more costly Asia and US markets, but also there. we have all the ingredients to turn this around because we are the best operator we have done an IT stack restructuring ourselves at MyTresa three years ago we have the people and we know what to do which is always good and therefore it's a great asset situation because if you look at the valuation of MyTresa stock right now it's very low so exactly as you say this is a core question that everybody asks how far are you what is the trajectory how well and we have to report every quarter an improvement in that situation matter bottom is the photo profitability use improving the last situation and then coming to a a good trajectory of this is always our goal, the $4 billion net sales of 7% to 9% adjusted EBITDA, and if you calculate that and convert it into multiple in the share price, it is a real upside. It's a real upside, and it's a high opportunity for value generation, and that's why I'm here.

Aaron, Analyst — Goldman Sachs

So with this idea that valuation might be low, and we need to finish off in two minutes, But if you look at the shareholding structure, so you still have Richemont with 35% share. You have the consortium of funds with, I think, close to 40. So how do you think about the risk or the opportunity of a liquidity event to increase the float eventually?

Martin Beer, CFO

I think there should never be, you know, like a negative sentiment on that. But, I mean, also the anchor shareholders really see the value in this. and that's why the liquidity event is not on anybody's schedule right now.

Aaron, Analyst — Goldman Sachs

Anything you'd want to conclude with to any message? Maybe are some of the investors not getting part of the story that you want to pitch or any sort of recurring misunderstanding that you'd want to address?

Martin Beer, CFO

No, it's really you have to take a closer look at Lux experience is to really understand the uniqueness, the unique positioning of being a multi-brand global digital luxury leader and to see how valuable that positioning is and also how defendable it is. I mean, we are operating, our position is at high barriers of entry because obviously it all relies on a very strong relationship with brands. And you cannot tomorrow show up and say, let me have to sell you your bags or whatever so it's a very strong position and we are seeing really good momentum well help me thank Martin for the message thank you so much for being here thank you