Matchesfashion accounts reveal impact of pandemic on sales

Matchesfashion's latest accounts reveal the impact the pandemic had on the luxury fashion retailer in the year to January 2021 with sales down £41m to £392m, while losses widened from £5.6m to £36.5m.

The London-based group said the numbers were a reflection of customer behaviour during the height of the pandemic, which led to all social occasions being cancelled and most people working from home, causing demand for its high end fashions to slump. It also faced challenges with production delays, along with many in the market.

Auditors PwC said the business was at risk of breaching its banking covenants in January next year under its “base case” and “downside case” assumptions, unless it addressed the issue with the group's investors. But Matchesfashion, which is majority owned by private equity house Apax Partners, said its investors were "fully supportive" of the business and had reinvested in 2020 and in 2021 to the tune of £85m.

"We are in regular dialogue with our lenders regarding the next covenant test and we are confident we will reach a positive outcome given recent improvements in trading," the company said in a statement.

Matchesfashion has undergone a series of management changes of late with former CEO Ajay Kavan, previously an executive at Amazon, leaving the business after just one year. He was replaced by luxury industry heavyweight Paolo de Cesare, former president of Printemps, who joins the business later this year.