'Shell-shocked' Matchesfashion founder vows to stay close to the business
The day after you sign a deal to sell the company you’ve nurtured for 30 years for a rumoured £800 million, you're bound to feel a little overwhelmed, and so it was with Ruth Chapman.
The Matchesfashion co-founder said that “it hasn’t quite sunk in yet” but she and husband Tom (the “super-smart and creative” business brain as she describes him) are “a little bit shell-shocked but very, very happy”.
“We’re figuring out the next steps [but] we’re going to stay really close to the business and watch it go from strength to strength,” she added.
Chapman was speaking at the FT Weekend Festival in London. The event that brought together luminaries from the world of art, politics, culture and fashion was also something of a family affair with Tom Chapman in the audience, along with their two daughters (both impeccably on-trend and dressed in Millennial pink).
And the Chapmans are certainly becoming a star attraction, last Friday’s headlines having transformed them from respected industry figures into business celebrities with much wider recognition.
That’s perhaps no surprise. ‘£800 million’ is the kind of figure newspaper headline writers love. The Chapman story isn’t exactly one of rags to riches or overnight success, after all, a luxury store in Wimbledon and 30 years hard work aren’t quite the stuff of fairytales. But there is something magical about the Matchesfashion story and the business even operates from a glimmering, stuff-of-fantasy tower with its tip way up in the clouds - London’s Shard.
STRUGGLES AND SUCCESS
The sale of the business, which has been agreed but isn’t yet complete, saw suitors beating a path to the firm’s door. Four of the world’s biggest private equity names competed to win the prize and drove the price up from an initial estimate of £600 million.
But interviewed by FT fashion editor Jo Ellison, Ruth Chapman said the firm wasn’t always quite so in demand. It soldiered on alone for 25 years and times were often tough. And in the run-up to taking on their first outside investors five years ago, the Chapmans had to work very hard to track down just the right people to help the business thrive.
“We had long nights of torment, thinking whether it was the right thing in giving up our independence,” Chapman said. “The reason we went online initially was because we had all these international customers saying ‘we love what you do and we wish you were in Canada, Australia, the US.’ We put all our stock online but the minute we did this we pretty much had nothing left to sell in the store. That was when the penny dropped and we went ‘uh, we can’t actually fund this any more’. The customer wanted it and we couldn’t give it to them unless we took investment.
“Tom went out and hustled to find the right investors to come into the business and when we got them it was just miraculous. It went against all the horror stories that you hear and they turned out to be really ‘elegant’, smart people who were very hands-off and left us to do what we wanted to do so, which was really empowering.”
And that really does seem to have been the catalyst to driving the business onto a mega growth trajectory, the start of its journey from a one-of-many fashion store businesses status to a standout online performer worth mega-millions. But even with 95% of its sales now being e-sales, its four London area stores remain crucial.
“Yes, we’re very much an e-commerce business, but we really are wedded to the idea of bricks & mortar as an experiential place you visit,” Chapman explained. “It’s more and more becoming less about buying something there [than] just having a wonderful experience, great customer service… discovering what Erdem’s inspiration was for his collection, or the latest bags from Loewe. It’s somewhere that you can go to be transported and learn about fashion and have fun.”
This superior omnichannel approach is one that luxury vendors worldwide are trying to get right at present, whether it’s Nordstrom introducing order online and try on in-store, or Burberry leading the charge as the ultimate luxury omnichannel brand. Pureplay e-tailers like Farfetch buying Browns are another example of this.
That means the competition faced by Matchesfashion both online and in-store is fierce and, as the market grows, it seems to get even more so. Avenue 32’s recent failure and style.com's closure are signs of just how tough the market can be.
Matchesfashion’s deep-pocketed new majority owners will be able to ensure that the business has the resources to compete. But Chapman said the brand’s past - and future - success relies on more than just investment cash. It’s also about its strong proposition.
One USP that’s key is its ability to ‘discover’ new brands. Matchesfashion was actually the retailer that introduced both Prada and Bottega Veneta to the UK market and it has also made a speciality of promoting young British brands.
“We always had that really strong connection to British designers,” Chapman explained. “We were known for finding and launching new talent. [The designers] were in London so we could call Roksanda and say ‘we sold one of your dresses and we need another 50,’ and she could make them in two weeks. We partnered with a lot of British designers like that. We helped them and they helped us. It was brilliant for the British fashion industry and brilliant for us.”
So what is it about any young designer that excites the Matchesfashion buyers’ interest? Surprisingly, it’s not just their strong creative work. “We need to figure out if they’re going to be in it for the long game and if they have resilience,” Chapman said. “Starting your own brand is a hard thing and they might not have the character to stay in it. They need to have the people skills to establish relationships.”
If they fit the bill “then you want to support them, so we can find a new designer and give them an incredible platform,” she added. The company’s buyers work closely with such brands “and in fact what we end up doing is building a range plan for them and giving them an indication of prices, an indication of what would work so they can go away and make that for us.”
LOVING THE CUSTOMER
Offering something new and different is increasingly important for the company’s growing customer base as modern shoppers seek something unique and on-trend for the undeniably large amounts of money they’re spending per item.
“Tom always said that we had to love our customers and we still have customers who are shopping with us [from 30 years ago]. They’ve remained loyal and connected,” she said, adding that the interest in ‘fashion’, rather than just great clothes, has really grown: “Regardless of age and gender, everyone now wants to feel current and cool and connected. The appetite for fashion is growing. You can see that from all the Millennials who are shopping with us, and the supersonically connected older people who are earning lots of money and shopping with us, too.”
But just because they’re more interested in fashion, doesn’t mean they don't need help when shopping.
“There’s a huge demographic of people who want to update their wardrobe constantly, who want help to put it together,” Chapman explained. “They really want to feel well dressed and fashionable. So you give them how-to-wear content pieces, how to wear the new length of skirt, what boots to wear with it. You can talk to them about different influences and how to put things together. They’re not models who are 5ft 10 and size 8. The women who spend the most are 40+. They worry about their arms, they have length issues, but they still want to feel cool, relevant, comfortable and flattered.”
And with the menswear business growing, that’s equally the case for men as it is for women, even though 30% of the people buying menswear on the site are actually women (buying for the men in their lives rather than making the ultimate gender-neutral fashion statement).
But whether selling to men or women, Chapman insisted that working out what they need for their lifestyles is crucial.
“The success of our business has been down to understanding people’s lifestyles, how much they're travelling now, how much time they’re spending in their pyjamas, how much people are exercising, how much they want to have in the wardrobe to go to the gym. We dress people for a holistic lifestyle.”
The customers are certainly feeling all this love with sales soaring last year and reports that the business is seeing more of the same in 2017. Not that Ruth Chapman had many numbers to share. Until the sale is complete, there’s not a lot that she can say. But she’s obviously enthused when she discusses the business - from the designers to the customers - and she really doesn’t sound like someone who’s going to fade into the background now that new owners are about to step in. There are clearly a few more chapters left to write in the Chapman fairy story.
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