Following today’s release of Maisons du Monde’s figures for the year ending 31 December 2022; Jamel Boughedda, retail analyst at GlobalData, a leading data and analytics company, offers his view: “Maisons du Monde has managed to navigate a challenging year, achieving its updated full year targets and reporting a total sales decline of 5.1% in FY2022, as a high inflationary market, geopolitical uncertainties and weakening consumer confidence impacted its revenue. Its performance, against a 6.2% peak in inflation in France in October and November, was underwhelming despite its focus on collections and collaborations to boost its appeal, and the expansion of its marketplace to Spain and Italy. The furniture and homewares retailer reported an EBIT of €68.5m, above its updated guidance, although this still represented a significant decline from FY2021.
“Maisons du Monde’s full year sales in France fell 5.4% to €663.8m, as it underperformed the French home market, which grew by 4.6% in 2022. This was impacted by store closures, but it also points to a lack of appeal among consumers. The retailer’s full year international sales fell by 4.7% to €576.6m. A positive performance (+2%) in Spain and Italy (which make up 58% of total international sales), due to store openings and the expansion of its marketplace, was unable to offset hefty declines of 13% in Belgium, Germany, and Switzerland where consumer sentiment has been especially hit. Maison du Monde’s online sales fell 15.5% year-on-year, up against stronger lockdown comparatives, as shoppers returned to its stores. The group is continuing to invest in its online proposition, such as expanding its marketplace to cover its three largest markets, and automating its second distribution centre, which will be live by the end of 2023.
“Decoration and furniture categories both reported declines across FY2022, down 3.6% and 7.1% respectively. Furniture was hit harder due to consumers’ lower discretionary incomes, whereas decoration held up better given the smaller-ticket nature of items, with frames and scented candles performing particularly well. “Decoration accounted for 60.0% of total sales as Maison du Monde’s limited-edition collaborations with influencer Lisa Gachet and designer Sakina M’Sa helped expand its product offering, boost its style credentials, and improve its consumer awareness, demonstrated by a 30% year-on-year increase in press mentions. Maisons du Monde is continuing to innovate to boost its sales, showcased by its partnership with Alma to allow customers to pay in instalments, improving customer satisfaction and allowing customers to afford more premium items. This is essential for multichannel retailers to offer and will be especially beneficial in countries where consumer sentiment is especially weak.
“However, 2023 will offer further challenges to Maisons du Monde given the context of high inflation and macroeconomic uncertainty. Consumers’ discretionary incomes will come under further pressure, and the retailer’s focus on protecting profits and cash will be critical. The retailer anticipates Q1 to be the low point of the year, with sales declining by low double digits. Maisons du Monde must invest in its value for money credentials and ensure consumers trade up to its higher ticket items, through further emphasis on its design and new looks, to navigate a tough year.”
