Change is once again afoot at MatchesFashion as it parts ways with the executive tasked with future-proofing the company.
Former Amazon vice president Ajay Kavan, who joined the online luxury retailer right before the start of the pandemic, is leaving. Maureen Chiquet, a MatchesFashion non-executive board member best known as the former global chief executive of Chanel, will take on the interim role of executive chairwoman as the board searches for a new chief executive.
Kavan’s exit was amicable, according to a person familiar with the board’s thinking, although it became clear in recent months that he was likely not the right leader to take MatchesFashion into its next phase.
In the past year, Kavan has reckoned with the fallout of the pandemic, which caused a slowdown in deliveries early on, as well as increased competition online, where multi-brand retailers are expanding their stock (and in turn, sales) by moving away from wholesale and embracing lower-margin models, including drop-ship and e-concession. While some online players thrived during this period, MatchesFashion, which has long been a go-to destination for occasion dressing, also struggled with serving that core customer.
In November 2020, Kavan hired Elizabeth von der Goltz, a veteran of Net-a-Porter and Bergdorf Goodman, as the retailer’s chief commercial officer in the hopes of further cementing relationships with key volume-driving luxury brands. Many of these labels are ending relationships with multi-brand retailers as they focus on direct channels, forcing stores to get creative to keep these brands part of their assortment. Recently, Net-a-Porter signed a deal with Prada to drop-ship products from both Prada and Miu Miu in order to keep the in-demand lines on its site.
However, this shift away from wholesale and towards a marketplace model isn’t a failsafe solution. “Short-term, marketplaces are net beneficiaries of the quasi disappearance of the grey market. Longer-term, traffic flows are much more volatile online than in the physical world,” said Bernstein analyst Luca Solca in a recent note to investors, adding that customer acquisition and retention costs are likely to increase as competition heats up.
“Whether differentiation will represent enough of a barrier to entry and create a profitable niche is a point of debate,” he said. “It is not obvious that there is a viable and profitable competitive space for a differentiated multi-brand digital retailer.”
And MatchesFashion faced an uphill battle prior to the pandemic. After years of what some viewed as overspending related to marketing spend and operational expansion, its chief executive Ulric Jerome — who succeeded founders Tom and Ruth Chapman — abruptly exited in August 2019. MatchesFashion’s owner, private equity firm Apax Partners, bought the company in 2017 at a $1 billion valuation. Growth has slowed since: In 2019, the site generated £430.5 million ($600 million) in sales, a 16 percent increase from a year earlier compared to 27 percent jump in 2018 and 44 percent in 2017.
Losses in 2019 were about £6 million, compared to a small profit of £2.4 million a year earlier. Figures from 2020 have yet to be released.
While Kavan was able to create a technology roadmap for MatchesFashion, the company’s board and Apax Partners are searching for a chief executive with luxury experience — and an understanding of buying luxury product — to replace him. (In January 2021, US-based competitor Moda Operandi made a similar move, replacing ex-Tesla executive Ganesh Srivats with luxury retail veteran Jim Gold, albeit on an interim basis.)
Chiquet, who left Chanel in 2016 after a 13-year run, spent her early career at Gap, Inc., and L’Oréal.