A person using a laptop, looking onto an ecommerce website
Matchesfashion’s collapse prompted many to prioritise their own ecommerce

Last March, Verda Alaton, founder of fashion jewellery brand Tohum, was ready to ship two exclusive collections to a UK online retailer that had become a cornerstone of her business.

The brand had paid for all the materials and the services of the workshops involved in production. Alaton was sure her invoice would be settled within a few months, because the retailer was a trusted partner that had been instrumental in the success of her popular Cowrie necklaces.

That same day, though, Matchesfashion, which was awaiting Tohum’s order, filed for bankruptcy. The administrator, Teneo Financial Advisory, laid off about half of the retailer’s approximately 500 employees, retaining the rest to sell off remaining stock at high discounts.

“With the bankruptcy news, a significant burden has been left with us,” says Alaton. “Not only the loss of the sales of the orders produced, but also the potential orders for the rest of the year: a big unknown and loss of sales for the future.”

It is a sentiment echoed by London-based designer Anissa Kermiche, who was left with unpaid orders worth about £40,000 from the Matchesfashion collapse, causing uncertainty.

Administrator Teneo did not respond to requests for comment and has not confirmed the amount owed.

Philip Hertz, head of restructuring and insolvency at law firm Clifford Chance, says the primary objective of administration is to rescue the company. He expects creditors who are essential suppliers to be able to recover in full if they are required for the ongoing running of the business.

“Matchesfashion represented about one-fourth of my business; the proportion is huge,” Kermiche says. However, rather than attempting to recover the lost money, she decided to restructure her company and strengthen sales through her own website — the direct-to-consumer (DTC) route. “With about £15,000 per month, we have managed to increase sales through our website by six times,” says Kermiche.

The brand invested in targeted advertising and keywords to improve the website’s ranking in Google searches. “We analysed sales to understand our customer base better, which we never bothered to do before. Getting to know the needs per age and territory helped us tailor a better offer with newsletters,” Kermiche adds.

As trust in retailers suffers following Matchesfashion’s collapse and the rescue of UK site Farfetch by South Korea’s Coupang ecommerce group last December, many emerging brands are following Kermiche in embracing DTC.

Jia-Jia Zhu, founder and creative director of US jewellery brand JiaJia, makes no comment on her relationship with Matchesfashion but says that its collapse spurred her first foray into DTC. JiaJia hired specialists to enhance the brand’s website, using search engine optimisation criteria, and to improve the user experience on mobile. “Within a month, sales have grown threefold,” Zhu says.

DTC encompasses a broad spectrum of activities, including website enhancement, social media engagement, and adoption of artificial intelligence-powered Web3, which is designed to improve traditional customer relationship management tools.

However, Neil Cunningham, co-owner and chief executive of media consultancy Cream, advises brands not to rush into DTC without clear objectives and an appropriate budget.

He stresses the importance of a properly functioning website and online channels that ensure seamless “human interaction”.

It can take as little as £1,000 in Google advertising for a brand to “learn quite a lot about market demand in one region and site performance”, he says.

The potential for small investments to yield results within a few months is encouraging, but more substantial efforts are often needed to ensure long-term resilience.

Olivier Billon, founder and chief executive of influencer agency Ykone, reports an increase in jewellers seeking support for their DTC initiatives.

“The effectiveness of influencer marketing in reaching targeted audiences and generating engagement has made it an increasingly popular strategy among smaller jewellery brands looking to amplify their presence in the market,” he says.

Billon gives the example of a campaign for Italian jeweller Vhernier that involved 59 influencers worldwide, reached 14.8mn people, and produced 200 images. Yet, while targeted activations might deliver short-term results, Billon believes that a budget of at least $100,000 is necessary to make a significant impact.

Another powerful DTC tool is a brand’s physical presence — something Thomas Montier Leboucher, founder of Paris-based jeweller Viltier, has embraced.

Now four years old, it has recently opened a showroom that doubles as an art gallery. When it launched during the pandemic, Viltier had no prospect of wholesale, so it was forced to turn to DTC — a move that is now helping it navigate the volatile retail landscape.

Historically, emerging jewellery brands partnered with online retailers as a fast track to growth. These tie-ups enhanced brand visibility among a global audience of fashion-conscious consumers, and provided valuable juxtaposition with high-end brands.

“Brands can also benefit from their retail partners’ broader marketing, personalisation efforts and editorial content, and they can avoid the logistical burdens of handling fulfilment, returns, and customer service,” points out Jeff Lindquist, a partner in Boston Consulting Group’s fashion and luxury practice.

However, relying solely on retailers has disadvantages, in addition to the risk that they go bust. Lindquist cites “less favourable margins, less control over the brand’s storefront and quality of the customer experience, and, perhaps most critically, limited access to valuable customer data that can provide rich insights to shape brand strategy.”

Even so, while some emerging jewellers are enthusiastic about the early results of their DTC efforts, the struggles of companies such as US apparel brand Allbirds and US eyewear company Warby Parker, which leaned heavily on DTC models, serve as cautionary tales.

“Success in DTC, over the long term, requires focus on quality across the digital customer journey — from inspiration to education, to purchase conversion, to aftersales experience,” says Lindquist.

“But it’s important to note that doing this well can be costly and requires a great deal of team bandwidth.”

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