French fashion retailer Maison 123 becomes profitable again despite market turmoil
In two years, Maison 123 (formerly 1.2.3) has made the tough transition from ageing chain in financial distress to profitable and ambitious brand, under the leadership of Axelle Mathery, who was appointed CEO of the French fashion retailer owned by the Etam group in summer 2020.
Maison 123 was founded in 1983, and last year it generated a revenue of €140 million (up 7.5% over 2019, before the pandemic). In 2022, the chain also tripled EBITDA, which was €1.6 million in 2021, the year in which Maison 123 first recorded a profit after years of losses.
“Amidst the current economic turmoil, with the fashion market in France slumping by 7.5% compared to three years ago, some firms are managing to make it out of the doldrums, and this is what Maison 123 wants the world to know today,” said Mathery, who was previously in charge of the Cosmoparis and San Marina chains, when they were owned by Vivarte.
To revive Maison 123, Mathery did not have to wipe the slate clean product-wise, but she did comprehensively freshen up the range.
“I jettisoned the brand's past history. Maison 123 was built to cater to the formal and occasion wear segments, and has now become an everyday brand, with a more casual style and, for example, more knitwear,” said Mathery.
Lower inventory, fewer promotions
Mathery also decided to reduce purchasing volumes, in order to cut down on residual inventory and limit the brand’s reliance on discounts during the year. In addition, Maison 123 has revised its collection strategy: product launches have increased from five to 10 per season (but the collections are more streamlined), the number of products displayed in-store has been reduced to better highlight the looks, and ad campaigns have been shot in exotic locations, like Montana for this winter, and Brazil for the coming summer season.
Sourcing is divided up equally between neighbouring countries like Italy and Portugal, and major exporters like India, China and Bangladesh. Next winter, Maison 123 will boost its accessories range, introducing more leather goods and footwear across the entire chain.
Maison 123 is positioned in the mid- to high-end segment (blouses are priced from €80, dresses from €170), and sees Caroll as one of its competitors. Mathery said that the brand has managed to attract younger consumers.
“We attract new customers every day. Our captive audience consists chiefly of active 45-year-old women who follow trends but aren’t fashion addicts, sensitive to fabric quality and fits,” she added.
Maison 123 has 650 employees and operates 227 stores, 150 of them in France, where it intends to start opening new stores again, with 11 planned for this year. The cities of Lille, Aix-en-Provence, Bordeaux, Nice and Paris are on the list.
“Now that [Maison 123] is profitable again, a capex of €6.7 million has been allocated to it by the [Etam] group to execute this retail expansion plan, which also includes a dozen renovations,” said Mathery, who indicated that unprofitable stores have been gradually closed down over the past two years, while some rents have been renegotiated downwards.
Conversion rate up by 12%
The new openings will all feature the brand’s new interiors concept, designed in-house and first introduced at the end of 2022, with the store in the Carré Sénart shopping mall.
“The sales area has a warm feel, with an emerald green mural, pale pink and white hues, and plenty of plants and wood panelling,” said Mathery, who twice a week makes in-store visits. In 2022, Maison 123’s footfall dropped by 16% compared to 2019, but its sales conversion rate increased by 12%.
Outside France, the retailer is planning to enter the Spanish market this year, by deploying corners in various branches of the El Corte Inglés department store, before targeting other department stores in Northern Europe. Talks are also under way to establish a presence in the Middle East and South America via local master franchisors.
When a headhunter contacted Mathery with a view to taking charge of Maison 123 three years ago, she wasn’t familiar with the retailer. When she was told it was the new name of 1.2.3, she frowned, but was then won over by the ambitious plans of the retailer’s owner, the Milchior family. Mathery now intends to bridge the brand awareness gap by means of a major ad campaign planned for 2023.
€160 million sales target for 2023
In this case too, the fact that the company is once again profitable made the budget allocation possible. Maison 123, whose prices are increasing by between 5% and 10% due to inflation, will pick new brand ambassadors and advertise in the press, on social media and with posters. "There are plenty of opportunities to make Maison 123 better known,” said Mathery.
What about staging a runway show, like Etam?
“One day, why not. But we’ll do it differently. An event in Maison 123 style, to show how the brand has evolved,” said Mathery, who is primarily focused on the targets set for 2023: reaching a revenue of €160 million, and further improving profitability.
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