Following today’s release of Maison du Monde’s figures for the three months ending 30th September 2023; Sophie Mitchell, retail analyst at GlobalData, a leading data and analytics company, offers her view: “In line with lowering its full-year sales guidance to a decline of c.10% earlier this month, Maisons du Monde has announced a weak set of Q3 FY2023 results, with sales down 9.4%. At the end of its H1 FY2023 the retailer believed it was on track to recover, having implemented its ‘3C’ plan (reinforcing and accelerating all actions across customers, costs and cash). However, recovery has not materialised, as a result of both declining consumer confidence across Europe, and the price positioning of Maisons du Monde as an upper mass-market retailer in a challenging economic environment. Global inflation has resulted in many consumers trading down to discounters or more value-driven mass market players, so Maisons du Monde’s position in the homewares and furniture market is a weak spot, as it has not been able to capture any consumers who want to trade down, but it is also not a premium retailer, so cannot capture those unaffected by inflationary pressures.
“The retailer’s decline was less severe in France with a fall of 5.6%, despite the retailer citing the rise of French inflation in August and September as having impacted consumer purchasing power and pulling down group sales. Additionally, despite the UK market having only made up 1% of the group’s sales in its FY2022, its exit from the UK market in Q2 FY2023 resulted in a €2.2m loss of sales. The group will implement a more favourable Swiss for Euro conversion rate for its pricing policy in Q4, which should help to bring up its international sales as Switzerland was a weak link in its international performance.
“Maisons du Monde’s online channel struggled this quarter, driven down by its German market, with group online sales declining 12.4% which will be in part due a normalisation of shopping instore again post-pandemic. Its online and instore marketplace has, however, witnessed ongoing growth (+30.1% GMV) and the group has invested in Germany through launching its marketplace there. Steady growth of its marketplaces in France, Spain and Italy along with the recent launch in Germany should help its online and offline channels to recover in Q4. The group closed six stores in the period, bringing its total down to 344 sites which it operates itself and three affiliated stores, with store sales declining by 8.2%. Although the group is proud of its hybrid model, with its marketplace present across both online and offline channels, the sales decline across both channels suggests the group should potentially look to consolidate its focus and investment on one channel, with the other acting as a support system.
“The remainder of the year will be challenging for the retailer, despite the efforts it is going to to improve its performance in Q4, including increasing the number of local brands on its marketplace and investing in pricing in Switzerland, as well as a continued focus on its 3C plan. With the festive period approaching, the remainder of consumers’ discretionary spend will be channelled into food and gifts, with home improvements likely to be put on the backburner.”
