Matchesfashion, a renowned luxury online retailer, witnessed an increase in its revenue in the year leading up to January 2020. Despite this positive growth, the company faced a substantial loss due to investments made in operations, technology, and infrastructure. While the revenue soared from £372 million to £430 million, the cost of sales also experienced a steep rise. As a result, Matchesfashion reported a net loss of £5.9 million for the year, marking a decline from the £0.8 million profit recorded in the previous year. Additionally, the adjusted EBITDA figure for the latest period stood at £4.5 million, down from £14.7 million in the prior period.

Although the growth rate in revenue of almost 16% was lower than the 27% achieved in the previous year, it was still considered impressive. However, the company’s margin contracted from 39.5% to 37.2%, showcasing slightly lower profitability. While specific details regarding the company’s performance post-financial year-end were not disclosed, Matchesfashion did provide some general insights. It revealed a considerable decrease in order demand during the initial three weeks of the Covid-19 crisis. Fortunately, being an e-commerce-focused firm, Matchesfashion swiftly recovered and witnessed a consistent improvement in order demand on a week-on-week basis since early April 2020.

Nevertheless, Matchesfashion has not been completely sheltered from the impact of the crisis. Its physical stores located in London have remained closed since late March 2020, and planned brand and customer events have been canceled indefinitely. The company also had to furlough almost one-third of its workforce to manage the financial implications. Despite maintaining close communication with the brands it stocks, the crisis disrupted the production plans of these brands, leading to delays in receiving new-season products. Matchesfashion anticipates that this delay will adversely affect its trade for the remainder of the year.

Useful links:
1. Matchesfashion Official Website
2. Financial Times Article on Matchesfashion’s Performance