Matchesfashion warns on trading as Covid-19 batters sales

Matchesfashion
Sales at the Apax-backed company slowed down as Covid affected trading

Matchesfashion has warned that it may not be able to continue operating in its current form due to the Covid-19 pandemic.

The online luxury retailer is at risk of breaching its banking covenants in January next year under its “base case” and “downside case” assumptions.

Sales at the Apax-backed company slowed down as Covid affected trading across the retail sector.

READ MORE: Paolo de Cesare named CEO of Matchesfashion

Auditors at PWC and company directors flagged a “material uncertainty” over its ability to continue as a going concern if trade did not improve.

Matchesfashion has already twice agreed covenant waivers with HSBC and Wells Fargo.

Apax has injected a further £85 million since February last year.

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

“Our shareholders are fully supportive of the business and invested further in 2020 and then again in 2021,” Matchesfashion said.

“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.”

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