Matchesfashion revenues rise, but investment punches big hole in earnings
Matchesfashion may have made a loss in the 12 months immediately before the pandemic hit last year, but its directors said they were “satisfied” with the results in the year to January 31 2020.
The loss came as the retailer’s revenue continued to grow, but it made “significant investments” in its operations, technology and infrastructure.
Its revenue rose to £430 million from £372 million, but the cost of those sales rose sharply. And its net loss was £5.9 million, worse than the small profit of £0.8 million a year earlier. Meanwhile, its adjusted EBITDA figure was £4.5 million for the latest year, down from £14.7 million in the previous period.
And while its revenue growth was lower than the 27% of the previous 12 months, at almost 16%, it wasn’t a weak figure by any means. However, the margin did contract to 37.2% from 39.5%.
The company didn’t give any specific figures about how trading has been since the financial year ended, but it did share some general information. It said that in the first three weeks of the Covid crisis last spring, “order demand was significantly down”. However, given that its main focus is e-commerce, it’s no surprise that it has recovered since then. From early April 2020, “order demand has continued to improve week-on-week”.
But the company has still been hurt by the crisis and since late March last year, its physical stores in London have been closed and planned brand and customer events have been cancelled. It has also furloughed almost a third of its staff.
And while it has “maintained close contact” with the brands it stocks, the production plans of these brands have been disrupted by the crisis. This has caused delays to it receiving new-season product and it expects that “this will impact trade for the remainder of the year”.
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