A MYTE Resurgence?

We covered the IPO when it came out: Mytheresa Aims High. At the time, I was impressed with its ability to operate at the high end of the market and in a way that was consistent with the demands of the most exclusive brands.

There was high demand for the IPO. They initially filed at $16-18, revised to $24-26, and priced at the high end of the range. After a strong opening and trading in the mid-30s, the shares trended to oblivion at $3 a share last year. It's starting to recover, for good reason.

What happened? This happens when high IPO hopes meet realities like slower growth and higher losses, resulting in dashed expectations of a company that might soon be included in the S&P 500.

However, the company has grown while the stock price declined and flipped to profitability. Instead of the 4x sales multiple in 2021 on money-losing operations, it's at 0.7x with solid margins. Management sees an opportunity to grow their current $1B annual revenues to $4B and maintain profitability.

As a group, companies at the intersection of fashion and technology have not had an easy time. Still, there have been some notable survivors like Revolve Group $RVLV and comeback stories like TheRealReal $REAL.

Why bother? The luxury fashion market is ~$150B, profitable and resilient. The principal players are mostly technology-averse but understand they need to get there. This creates some attractive niche opportunities that are worth striving for.

A Significant Deal with Richemont $SWX: CFR

Richemont is a global luxury company with $20B (not a typo!) in annual revenues. (They are making a deal in which MYTE will acquire YOOX Net-A-Porter Group (YNAP) in exchange for 33% ownership of Richemont in MYTE.