MyTheresa, the German online luxury retailer, was valued at $ 2.2 billion when it went public in New York on Wednesday, highlighting the extraordinary jump in its valuation over the past two years and validating hedge funds that fought vicious legal battles for a piece of the business.
The Munich-based group, which was once part of bankrupt US retailer Neiman Marcus, said it had valued its shares at $ 26 each, the high end of its target range.
MyTheresa sells over 200 luxury brands including Burberry and Prada and had more than half a million active customers at the end of September. It shipped over a million orders to 133 countries in its most recent financial year, according to its IPO prospectus, with net sales of 450 million euros, an increase of 18.6 % compared to the previous year.
At its bid price, MyTheresa’s market cap of $ 2.2 billion represents a rapid jump from valuation estimates in recent years and a big win for private equity group Ares Management, the largest shareholder in MyTheresa. Neiman Marcus, the department store chain owned by Ares and the CPPIB’s Canadian Pension Plan, acquired MyTheresa for just $ 200 million in 2014.
The online retailer has become a bone of contention in a complex debt restructuring executed by Neiman in 2019 as its core department store business faltered and then again after bankruptcy.
Ares had MyTheresa controversially transferred out of reach of Neiman’s creditors in 2018, but as part of the restructuring settlement, parts of the company were returned to hedge funds and other groups of creditors in the form of preferred and common stock.
Last year, Ares and the CPPIB agreed to hand over an additional $ 172 million of their interest in MyTheresa to unsecured creditors, after a heist of hedge funds, Marble Ridge Capital, persuaded the court bankruptcy to authorize an investigation of the original transfer agreement. The owners of Neiman have not admitted any wrongdoing.
Marble Ridge has since been liquidated after its founder Dan Kamensky was accused of fraud, extortion and obstruction of justice on his relationship with Neiman Marcus.
When an expert witness for creditors valued MyTheresa at $ 925 million last year, Ares and CPPIB told bankruptcy court that the figure was “astronomically high” and “bears no resemblance to reality. “. In 2019, Neiman’s bankers received offers for MyTheresa that did not exceed $ 500 million.
The Bumper IPO therefore offers MyTheresa owners a significant salary. Together, they sell 2 million of their shares, worth $ 52 million.
The action will debut on the New York Stock Exchange on Thursday.
The listing comes after an optimistic start to the year for IPOs. It also signals the continued appetite of investors for consumer-facing businesses with a technology advantage. Last week, shares of online lender Affirm and e-commerce platform Poshmark exceeded initial expectations and then doubled on their market debut.
MyTheresa will continue to be headed by Managing Director Michael Kliger and will retain its incorporation in the Netherlands for tax reasons. Its prospectus lists the obligation to file taxes in other jurisdictions, such as the United States, as a risk factor.
The company, which operates only two physical stores in Munich, said 53% of gross merchandise sales were generated on mobile devices in fiscal 2020.
It has touted its children’s and men’s units, launched in early 2019 and 2020 respectively, as potential growth engines.