Luxury retailer Matches has experienced a decline in sales and increased losses, citing various factors such as Brexit, cautious consumers, and rising interest rates. These challenges, along with the transition from wholesale to concessions for certain key labels, have affected the company’s revenue, which fell by 1.68% to £380.1 million in the year leading up to January.
Despite these obstacles, there was a positive trend in terms of orders, with a 12% increase before cancellations and returns. This growth was driven by a resurgence in occasionwear, with sales in this category rising from £677.1 million to £758.2 million compared to the previous year.
However, the adjusted EBITDA loss for Matches widened to £33.7 million, compared to £25 million the previous year. On the other hand, the gross profit margin did see a slight improvement, rising from 32.7% to 33.5%. The operating loss for the year amounted to £67.2 million, up from £37.5 million in the previous year.
Despite these financial setbacks, Matches remains optimistic about its turnaround efforts. CEO Nick Beighton, who took over part-way through the financial year, acknowledged the challenges but expressed confidence in the company’s plan to transform into a stronger and more profitable business. He believes they are on the right track, as they have made changes to the management team and strategy under his leadership.
Beighton has outlined a three-year turnaround plan, which includes sharpening the brand portfolio and reducing the number of brands in Matches’ lineup. They have already decreased from 800 to 600 and aim to further refine it to around 450 by the end of next year. These changes, along with the improvements observed in key markets like the UK and US, give Beighton confidence in the company’s ability to emerge stronger.
Overall, while Matches has faced various challenges resulting in decreased sales and increased losses, the company remains hopeful about its turnaround efforts under new leadership and strategic changes.
Useful links for further reading:
– Financial Times
– Retail Gazette
