Following on from the demise of MATCHES last week, this is a great article from Vogue Business around the journey that led to the appointment of Administrators as well as what's next for Matches Fashion.
The backdrop to the business' fortunes are quite useful in understanding its demise of a period of time:
👉 Matches was an initial leader in the online curation of brands, with around 600 luxury labels reaching customers in 170 countries via its website, matchesfashion.com before it was sold to Apax in 2017 for an undisclosed sum
👉 in 2019, sales reached £430m but costs had started to mount. Before the Covid pandemic struck, the business was already loss-making, seeing increased competition from the likes of SSENSE and FARFETCH
👉 The growth in number of luxury e-tail platforms led to price wars and driving prices downwards at a time when costs were increasing and visitors to the platforms was decreasing due to the change in the way that content now discovers consumers online
👉 Losses widened and numerous CEOs were drafted in, before Matches settled on ex-ASOS.com executive, Nick Beighton in 2022. Apax injected a further £60m to keep it afloat in 2023 before selling it to Frasers Group for £52m at the end of 2023.
In terms of the events leading up to the Administration, whilst the Administrators' proposals will likely have further information within them, this article cites Sky News who understood that suppliers had baulked at the big discounts that the new owners were requesting, others reporting overdue amounts and others then terminating contract.
Notwithstanding the above, it's likely that the steps needed to facilitate a workable turnaround (which is what Frasers did with FLANNELS) were perhaps too many in the time that Matches had available to it and that maybe utilising a platform as an intermediary has had its day at a time when brands are increasing their capability in terms of direct to consumer sales.
#turnaround #restructuring #retail #fashion #luxurybrands
CMO | Advisor | Founder | The RealReal | Second Life
1moused and vintage were not in our vocabulary.