Online luxury retailer Mytheresa, formerly of Neiman Marcus ’troubled department store, has found a high price at their first market. While the industry seems to be ticking all the right boxes for investors, not every move is favorable for it.
This week, about one-fifth of Mytheresa’s parent company, MYT Netherlands, was sold to investors at a valuation of $ 2.2 billion. Taste for fashion e-commerce businesses is strong among investors. One week after their first public offering, Poshmark shares are trading around 66% above where they were initially priced. On Thursday morning, MyTheresa shares started trading at $ 35.85, and were recently up 29% on the New York stock exchange.
It is a good outcome for the owners of Mytheresa, a private equity firm Ares Management and the Canadian Pension Plan Investment Board, following a false legal spat and bankruptcy of Neiman Marcus. The owners of the department store sued the two for changing Mytheresa ‘s place in the corporate structure of the failing retailer in a way that put it out of the reach of creditors.
Proceeds from the sale will ultimately be used to settle debts owed by the parent company as part of the bankruptcy settlement. While the loans won’t mature until 2025, they will have an expensive 7.5% coupon so it makes sense to let them out early.
Investors have paid through the nose for the business. At the IPO, Mytheresa was valued at four hours last year’s sale and more than 50 times earnings before interest, taxes, depreciation and impairment. The highest bid received by its owners in 2019, when they tried to sell the business, was just $ 500 million.