Matchesfashion Revenue Flatlines, Loss Widens in Fiscal Year 2021
Matchesfashion struggled to bounce back in the fiscal year that ended Jan. 31, according to its Companies House filing published Wednesday.
The luxury e-commerce retailer’s revenue in the period was 386.6 million pounds, down 1.1 percent compared to the same period a year ago.
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Its earnings before interest, tax, depreciation and amortization in the period widened to 23.8 million pounds in loss from 17.2 million pounds in loss a year ago. The total loss for the financial year 2021 was 38.6 million pounds.
Matchesfashion revealed that its business was negatively impacted by Brexit and lockdowns in the first half of 2021, which led to a 9.4 percent dip in revenue in the period. In the second half, revenue grew by 8.3 percent year-over-year.
The retailer said the bounceback in the second half was the result of “a return to a larger, more focused fall buy that traded well with year-end sell-through up 2 percent to 83 points,” which also improved Matchesfashion’s margin in the period.
The company, which sells “a modern edit” of women’s and men’s products from more than 600 designer brands to customers in more than 170 countries, said the COVID-19 pandemic, which “disproportionately impacted” the retailer’s occasionwear offering, was the key reason behind the decrease in sales.
Another key barrier was the additional administrative and duty burden caused by Brexit, the company said. To solve the issue, the retailer set up an intake center in the Netherlands midway through fiscal year 2021. Overall, the cost of Brexit was 10.5 million pounds in the period.
The retailer has also experimented with the concession model with five brands from a luxury group, the filings revealed. Matchesfashion said this model “requires a greater level of technical integration and data exchange between the brands and Matchesfashion,” but it helps “reduce promotions and sell more stock at full price, whilst maintaining strong levels of sell-through.”
Some 57.6 million pounds were injected by indirect parent companies via the issuance of new loan notes to fund operating cash outflows, service borrowings and repay amounts drawn under the group’s asset-backed lending facility. An additional 40 million pounds of funds were raised last April.
During the period, Ajay Kavan made a surprise exit from the fashion retailer after just 12 months on the job, with Maureen Chiquet assuming the role of the executive chair until Paolo De Cesare was appointed as CEO in October 2021. Nick Beighton succeeded De Cesare last July, becoming the fourth CEO in five years at Matchesfashion.
The retailer touted that recovery is now well underway, as it logged double-digit growth in revenue in the quarter between August and October.
Beighton said “the trajectory we saw coming into 2022 of higher full-price sales and growing demand — especially in the U.S. market — has continued through the year.”
“With the new executive appointments across the business, we have the right team in place for the next phase of our business transformation. As we go into 2023, we will continue to service our top-tier customers while also broadening our offering and business model to ensure we have the ultimate edit for every fashion category,” he added.
During this period, Matchesfashion threw a variety of events, especially during Frieze, to showcase its prowess as a respectable fashion destination. It served breakfast cooked by Michèle Lamy at the top floor café at its town house at 5 Carlos Place. Art critic Antwaun Sargent hosted his birthday dinner with friends like Tyler Mitchell, Jeremy O’Harris and Rafael Pavarotti, while Raf Simons celebrated his homeware collaboration with Kvadrat there as well.
