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Independent fashion could be impacted by the collapse of matches.

Fashion & StyleIndependent fashion could be impacted by the collapse of matches.

Less than a month after London-based retailer Matchesfashion was placed into administration, independent labels remain uncertain about when they will be paid for orders produced for the retailer as well as how they will make up for lost sales elsewhere. After the Frasers Group abandoned plans to turn around the loss-making e-commerce site, employees and brands were blindsided. Frasers acquired the site less than three months after the retailer's buying directors flew back from placing orders at Milan Fashion Week. The retailer's operating losses increased to over 50 million dollars in 2022, up from £25 million the previous year. Matches is a smaller player with revenues of $380 million, but has historically played an outsize role for independent fashion due to its long-held image as a booster of small brands. The sale of Matches to Frasers Group for just £52 million was a huge loss for the company, which was once valued at $1 billion. The group announced in March that it had placed the retailer into administration and was cutting 273 jobs. The retailer is still accepting online orders and this week is holding a clearance sale at an East London venue, offering customers 90 percent off on brands like Jil Sander and 16 Arlington.

There are worrying signs.

Vendors say Matches was getting bigger discounts on their invoices before the shutdown. Changes may have come too late for many independent labels, despite the fact that Farfetch sold to South Korea's Coupang in December. The managing director of London-based womenswear label Molly Goddard said that they had stopped future deliveries to mitigate to risk. While the brand has sought to ramp up its direct-to-consumer business in recent seasons, it was once one of its largest stockists. The brand wouldn't comment on whether outstanding invoices will be paid or the administration process. In the most recent season, the company took less than £50,000 worth of orders, down from more than a million orders in the previous season. The failure of Matches has significant repercussions for the wider fashion retail sector and the British Fashion Council is working with funders and the BFC network to develop a package of support for designer businesses affected. A broken system.

Independent fashion businesses that don't have a lot of funding or niche offerings can be difficult to operate retail stores. The decline of department stores and multi-brand e-tailers is one of the challenges facing brands. The UK is taking an especially hard hit due to the economic consequences of the decision to leave the EU and the removal of tax-free shopping for tourists. London-based Farfetch, which connects multi-brand boutiques to its vast online marketplace, as well as providing white-label e- commerce services for brands and retailers, was saved from the brink of bankruptcy when it was acquired by Coupang in December. The company's plight raises questions over the broaderecosystem of stores and brands that stock the platform, as well as the future of the historic London-based luxury boutique it acquired in 2015. The first question that I ask of new accounts these days is not when they will make payment, but if they will pay at all.

Independent designers and smaller labels are often the last to be paid by retailers because of the need to retain relationships with big luxury brand vendors.

John Murphy, president of a London-based luxury label, said that he had never seen an environment like this in 36 years in the business. After securing payment for its resort and spring collections, the designer decided to stop working with the retailer. ManyTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkia

It's easy to say that the simplest way to decrease exposure to the volatile world of luxury e-commerce is to pivot to direct-to-consumer sales. Digital marketing is costly at a time when it is harder than ever to grab consumers' attention online, while going direct-to-consumer also comes with operational headaches for small organizations. Smaller brands selling directly without the support of a distribution or licensing partner or wealthy backer is an impossible task. Some brands are turning to niche pockets of wealthy consumers, refocusing their product offering and marketing to categories where they feel more confident they will see a return. While retaining a few key wholesale accounts for ready-to-wear, it has meant ramping up its bridal and made-to-order businesses. The brand is focused on cost-saving and looking at relationships with retailers like LA-based Maxfield and multi-brand boutique chain TheWebster. The accounts are still important for getting products in front of the right audience who can afford the brand. Do we need to spend a lot of money on a campaign?

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