Matchesfashion booms on ‘luxury rewired’, US is key market
Matchesfashion went from strength to strength in the year that it was bought out with revenues surging 44% and profits up 34%. And, importantly, as much as 82% of its business was generated outside its home market, the UK.
2017 really was a stellar year for the firm as private equity giant Apax last summer paid £800 million for a controlling stake in the company that only shortly before had been expected to fetch £600 million.
And its results for the year certainly underline why the price was so much higher than predicted. As mentioned, revenues soared, reaching £293 million (or $394 million at current exchange rates). Meanwhile profit on an Ebitda basis rose from £19 million/$26 million up to £26 million/$35 million.
The average order value was £542/$729, while 95% of the company’s business was generated online, with web sales growing 50% year-on-year. And website visits increased 36% to 75 million, with more than half (51%) of online sales generated via mobile.
US IS LARGEST MARKET
So those are the figures, but what really mattered last year? Well, the real standout market was the US where sales rose by 54% to make it to the firm's largest country by revenue.
And the company also said that technology was key. That was what “enabled the business to scale internationally, enhance the customer experience and power social innovation such as the launch of The Style Daily and The Style Social, delivering unique daily content to users,” it said.
It added that the success of the app last year was what led to the big increase in mobile traffic, while the launch of two local-language websites in French and Korean were also important.
Building on its momentum in 2018, the company has clearly been busy so far. It has increased its physical footprint, tripling the size of its Hong Kong office and launching its state-of-the-art creative studio in East London last month. This summer it will also open a new 500,000 sq ft global distribution centre in London followed by a five-storey townhouse residence in Mayfair at 5 Carlos Place.
Its townhouse concept is one way of unifying the digital and physical aspects of its business while also boosting its ultra-luxury credentials. “Conceived as a combination of retail, culture and broadcast, the townhouse is designed to connect and inspire customers, creating a range of content across editorial channels and social platforms,” it said.
CEO Ulric Jerome added on Monday: “Our mission is to create the most personal luxury shopping experience in the world, underpinned by insight, technology and our unique fashion point of view. The luxury customer is driven by discovery and our aim is to inspire loyalty by constantly innovating and partnering with the best brands. We call it ‘luxury rewired’ and we’re investing at scale to meet these evolving customer needs.”
And he clearly sees plenty of growth potential for the future. “The global online luxury market is seeing strong growth but penetration is still very low, so the opportunity is huge,” he said. “We continue to accelerate profitable growth in our international markets and we see that momentum continuing throughout 2018.”
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