Matchesfashion sounds the alarm after pandemic sales hit

Matchesfashion has sounded the alarm bells about its ability to function in its current form after being beaten by Covid.

The online luxury retailer is at risk of breaching its bank covenants in January next year under its “base case” and “negative case” assumptions, which triggered the warning in its latest accounts.

Sales of the Apax-backed company dried up when the pandemic struck.

PWC’s auditors and company directors have reported “significant uncertainty” about its ability to continue operating if trade does not improve.

Matches has already twice agreed to covenants waivers with HSBC and Wells Fargo.

Apax has injected an additional £ 85million since February last year, according to documents from Companies House.

Sales fell from £ 41million to £ 392million for the 12-month period to January 31, while pre-tax losses fell from £ 5.6million to £ 36.5million .

A spokesperson for Matches said: “Our shareholders fully support the company and have invested more in 2020 and then again in 2021. We are in regular dialogue with our lenders regarding the next covenant test and we are confident that we will achieve a positive result in view of recent improvements in trade.

Matches was founded in 1987 by husband and wife Tom and Ruth Chapman as a one-stop shop in Wimbledon Village. The company now has a handful of stores, but has become best known for its shopping website, which features hundreds of luxury designer brands.

Sales have increased, according to insiders, as shoppers return to the search for evening dresses and tuxedos this winter.

The matches also attracted new customers, who before the pandemic were uncomfortable parting with nearly £ 2,300 for an Alexander McQueen dress online and are now placing regular orders after the drastic change in shopping in line during the pandemic.

Last month, Matches hired retail heavyweight Paolo De Cesare as new managing director to lead its takeover.

His former boss, Ajay Kavan, resigned in March a year after taking office. His predecessor, Ulric Jérôme, abruptly resigned in 2019.

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