Matchesfashion represents a product business model. The company sells clothing and accessories for both sexes from over 400 established and emerging designers. Apart from physical products, the company also sells ‘intellectual’ products, style advice, offered 24/7 by its fashion concierge team in a work-for-hire business model that operates alongside the product business model. The physical stores are now available in 13 locations including Wimbledon, Richmond, Notting Hill and Marylebone.
Matchesfashion was started as an offline store in Wimbledon in the year 1990 by a British couple, Tom and Ruth Chapman. Sixteen years later, in 2006, the company also ventured into online retail landscape as it sensed the changing trends in fashion retailing. The website now receives over 7 million visitors a year and sends out on an average over 1000 orders per week. The couple, in the process, also raised £20 million for the company.
Over the years, the company has come to be known as an omni-channel retailer delivering the best luxury fashion experience possible to an international client base via its website, matchesfashion.com. 70% of business is now online and 60% of the business is from outside the UK. It’s growth and strategic adaptation to emergine business landscape earned it the coveted invitation from UK Government to be part of the future fifty programme. Since the second quarter of 2015, the company has become an alumni of futurefifty, nevertheless, the growth continues to impress industry experts. So much so, that Scottish Equity Partners (SEP) invested £12 million growth equity investment in matchesfashion. Revenue in 2013 was $130 million, with 16 stores in London and website sales to 190 countries.
CUSTOMERS – WHO THEY ARE:
Matchesfashion.com’s customers are fashion literate customers around the world. The company trades in niche, high-end retail lables. Leading global brands such as Prada, Alexander McQueen, and Saint Laurent are part of the over 400 labels in its merchandise.
ENGAGEMENT – VALUE CREATION PROPOSITION:
Customers are able to access products from luxury fashion brands at a discounted price. To be included in the merchandise of MatchesFashion has become a statement in itself, as Matchesfashion is known as a high-end brand that caters to the sophisticated fashion conscious individual. It has developed a highly rated customer service and uses its off-line presence to provide a luxury buying experience. It also develops curated content in order to provide information about the latest fashion trends to its customers.
DELIVERY – THE VALUE CHAIN:
Matchesfashion purchases clothing and accessories at wholesale prices and store the stock in warehouses that it owns or rents. It then sells these items to customers at a discounted retail prices. Inventory management software and warehouse teams locate the purchased items, and third party logistics firms are engaged to transport products from warehouses to the end customers.
MONETIZATION – VALUE CAPTURE:
Matchesfashion captures value through marking up goods procured at wholesale prices or through consignment stock.
Written by Kandhasamy Muthu and edited by James Knuckles under the direction of Prof Charles Baden-Fuller, Cass Business School. This case is designed to illustrate a business model category. It leverages public sources and is written to further management understanding, and it is not meant to suggest individuals made either correct or incorrect decisions. © 2016
Published 21 April 2016