As it seeks to attract younger shoppers, Matches is promoting non-stop steep discounts on luxury products.
In a customer email on Sunday, the U.K.-based luxury e-tailer announced the launch of Matches Outlet. Positioned as “the destination to shop off-the-runway pieces from your favorite designers at up to 70% off,” Matches Outlet is set to be a year-round feature of the site. According to the email, “new womenswear and menswear collections will continually be added,” so customers can stop their “most-coveted styles for less … without waiting for seasonal sales.”
Matches Outlet currently offers nearly 6,000 products, with about 30% of them, or 1,750 products, selling for 70% off. Among them are The Row’s Jerry jacket in velvet, marked down to $735 from $2,450, and a Loewe high-neck ruched-jersey dress, at $1,095 from $3,650.
The move comes at a time of great change for Matches under new leadership. In August 2022, former Asos CEO Nick Beighton took the helm, marking the company’s fourth chief executive appointment in four years. Early on, he announced plans to broaden Matches’ appeal to more luxury consumers, including younger shoppers. Since then, the company has rolled out a series of new retail concepts, including a rental service through U.K.-based rental company Hurr, in November, and resale through luxury resale platform Sellier, last month. Among other changes, customer emails show that, in April, the company reverted to its “Matches” name, after rebranding to MatchesFashion.com in 2013 and, later, MatchesFashion.
In 2017, private equity firm Apax Partners acquired Matches from its founders, Tom and Ruth Chapman, who founded the company 20 years prior. The deal reportedly valued Matches at $1 billion. However, Matches’ annual revenue peaked in 2019. From 2020-2021, sales remained flat, at £386.6 million ($409.7 million), as losses widened. Executives owed the disappointing results to Covid- and Brexit-related challenges and increasing competition in the luxury retail sector. Matches did not reply to a request for comment ahead of this story’s publication.
Ad position: web_incontent_pos1
To date, Matches’ sales promotions have largely been confined to end-of-season and holiday-pegged sales. However, according to a 2020 study by market intelligence platform StyleSage, Matches was discounting 30-55% of its products throughout the year at the time.
While competitors have leaned into less risky business models, including e-concessions and drop-shipping, Matches has primarily focused on wholesale partnerships with brands. Doing so has made the company comparatively more susceptible to the current unpredictability of brands’ inventory and consumer demand. In November 2022, Matches began experimenting with e-concessions, based on the fact that it helps “reduce promotions” and maintain “strong levels of sell-through.”
Meanwhile, all online retailers have contended with increasing acquisition costs and also erratic customer behavior, as factors including higher interest rates and inflation have impacted discretionary spending.
Ad position: web_incontent_pos2
Matches has struggled to differentiate in the market as competitors including Farfetch have offered much larger product assortments, while others, like MyTheresa, have offered more unique curations. Matches offers 650 brands, according to the website, compared to Farfetch’s 1,400. As for exclusive products, Matches offers 600, compared to MyTheresa’s 1,000 and Net-a-Porter’s 1,500. It’s worth noting that MyTheresa does not have a sale section, which Net-a-Porter’s “Sale” is a top menu item leading to 13,400 items for up to 70% off.
Even as luxury executives on earnings calls stress a move away from discounting, consumers continue to shop sales and outlet stores continue to open. As reported by Modern Retail in August, outlet malls’ occupancy rates are up and, according to Simon Property Group CEO David Simon, “demand in the outlet business has picked up.” Also in August, Saks owner Hudson’s Bay Company introduced a new outlet concept. Meanwhile, The RealReal’s latest Luxury Consignment Report, released in August, showed that more people are buying more affordable luxury options. Sales of its fair-condition bags are up 130% year-over-year, driven by millennials and Gen Z.
Many luxury players are seeking channels where they can offload inventory without diluting the brand. For its part, affordable luxury brand Nili Lotan has launched an Archive section on its website offering products from past seasons at a discount. It’s only accessible to customers providing an email address.
Meanwhile, new data from CommerceHub shows that customers will be looking for discounts this holiday shopping season. According to a survey of 1,000 shoppers, 50% plan to spend less on gifts than in previous years and 70% will seek discounts or flexible spending options.
In August, Drapers reported that Matches had conducted layoffs on its buying, merchandising and personal styling teams. Weeks prior, Farfetch also cut jobs, amid decreasing revenue.
In January, Apex invested another £60 million ($63.6 million) in the company, showing confidence in the newly established leadership and growth plan.
