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MatchesFashion invested in international growth and brand awareness before the Covid-19 pandemic – boosting sales but resulting in a £5.6m pre-tax loss

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Image courtesy of MatchesFashion
Image courtesy of MatchesFashion
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MatchesFashion invested in international growth and brand awareness before the Covid-19 pandemic – boosting sales but resulting in a £5.6m pre-tax loss

MatchesFashion was positioning itself for international growth and to boost brand awareness in the year before the Covid-19 pandemic hit. That resulted in sales growth but, at the bottom line, a £5.6m pre-tax loss.

 

This week MatchesFashion reported sales of £430.5m in the year to January 31 2020. That’s 15.8% up on the £371.8m reported a year earlier. At the bottom line it reported a pre-tax loss of £5.6m – 250% down from a profit of £1.8m a year earlier.

 

The international luxury fashion business, owned since 2017 by Apax Partners, reported in its full-year figures on how it improved its presence in Japan through the launch, in March 2019, of a fully-optimised, fully-translated website and mobile apps, supported by a Japanese language customer care team. More than 80% of MatchesFashion sales are made outside the UK. It delivers to more than 176 countries, advising customers through its MyStylist fashion-concierge team.

 

During the year it rebranded its website and launched its first brand campaign, using social and outdoor advertising to boost awareness. It continued to invest in ecommerce and logistics, which it said had delivered “impressive sales growth both in the UK and internationally.” It spent £222,984 on website development, with improvements aimed at boosting profitability.

 

Ajay Kavan was appointed as chief executive in March 2020 with a brief to grow the business as it innovated and expanded in the luxury ecommerce sector. In the same month it launched a new tech hub, Here West, in Bristol – and the World Health Organisation declared Covid-19 a global pandemic. The retailer says it took “a number of actions to mitigate the short-term financial impact of this risk” and that the business was able to continue to operate throughout.

 

MatchesFashion, ranked Top250 in RXUK Top500 research, says that sales fell “significantly” in the first three weeks of the crisis but then improved week-on-week between April and July, when the statement was signed, although it was only published this week. More than a quarter (29%) of a workforce of more than 500 people were furloughed as the retailer closed its London shops in March 2020 and cancelled brand and customer events.

 

Three directors of MatchesFashion resigned during the year to July 2020. They included the previous chief executive Ulric Jerome, who left in November 2019, while co-founder Tom Chapman – who was joint chairman with his wife Ruth until private equity firm Apax Partners took a majority stake in the business in 2017 – left in May 2020.

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