Maisons du Monde Cuts Costs, Faces Online Crisis Amid Market Turmoil

NANTES, FRANCE – January 30, 2026 – French home decor retailer Maisons du Monde announced a mixed set of results for its 2025 fiscal year, revealing a company grappling with a severe downturn in its online business even as it achieves a degree of stability in its physical stores. While sales in the second half of the year nearly stabilized, a sharp 10% drop in online revenue during the critical fourth quarter and the withdrawal of a key long-term financial target have cast a shadow over its prospects in a challenging European retail environment.

In a move that rattled investor confidence, the company pulled its 2024-2027 cumulative free cash flow objective of €100 million, citing a “persistent lack of visibility in the macroeconomic environment.” This, coupled with ongoing discussions with financial partners to amend loan covenants, paints a picture of a company battening down the hatches for a turbulent period ahead.

A Tale of Two Channels

At first glance, the full-year results suggest a company weathering the storm. Sales in the second half of 2025 showed a marked improvement, declining just 0.7% on a like-for-like basis, a significant recovery from the 9% plunge seen in the first half. However, the fourth quarter, which includes the crucial holiday shopping season, tells a different story. Like-for-like sales fell 5.4%, driven primarily by a stark divergence between the company's sales channels.

Physical retail stores demonstrated notable resilience. Store sales were down only 2% on a like-for-like basis, with Southern Europe (Italy, Spain, Portugal) performing particularly well, even posting 1% growth in like-for-like store sales. This suggests that investments in store refurbishment and the appeal of the in-person shopping experience continue to resonate with a segment of its customer base. The company noted that its Autumn/Winter collection helped support this improved trajectory.

In stark contrast, the online channel, once seen as the engine of growth for modern retailers, has become Maisons du Monde's Achilles' heel. Online sales plummeted by 10.1% in the fourth quarter, a worrying trend given that this channel still accounts for nearly 23% of sales. The decline was particularly acute in its home market of France and in Northern European countries. This underperformance occurred despite what the company called a “record Black Friday campaign,” indicating the issues may be more profound than simply weak promotional performance.

The Digital Dilemma

The significant online slump points to deep-seated issues that go beyond the general slowdown in e-commerce growth seen across Europe post-pandemic. While the market is undoubtedly challenging, with high inflation and rising mortgage rates dampening consumer spending on discretionary items, Maisons du Monde's digital struggles appear company-specific. Customer reviews from recent years highlight persistent complaints regarding late deliveries, non-responsive customer service, and difficulties processing returns for damaged goods—all critical components of the online user experience.

In a clear acknowledgment of the problem, the company announced the arrival of a new head of digital, Olivia Camplez, in early January. It is pinning its hopes on her to spearhead a digital overhaul in 2026. Plans include a visual redesign of the customer's online discovery journey and enhancements to payment services. CEO Francois-Melchior de Polignac expressed his confidence that Camplez will “quickly contribute to taking our digital experience to the next level.”

However, the company faces stiff competition from rivals who have navigated the digital landscape more adeptly. IKEA, for example, managed to maintain stable sales in its most recent fiscal year by aggressively cutting prices, which drove up sales volumes and customer visits both online and in-store. This suggests that in the current value-conscious environment, a seamless online experience combined with a compelling price proposition is essential for success.

Financial Prudence or Peril?

Faced with declining sales and a volatile market, Maisons du Monde is doubling down on cost control. The company successfully executed its €45 million cost-saving plan for 2025 and has announced a new ambition to cut an additional €30 million in gross costs in 2026. This brings the total targeted savings for the 2024-2026 period to a substantial €120 million, focusing on logistics and headquarters optimization.

While these measures are crucial for protecting profitability, the withdrawal of its mid-term free cash flow guidance is a more concerning signal. Free cash flow is a key indicator of a company's financial health and its ability to invest in growth, pay dividends, and reduce debt. Pulling this target suggests management has very low visibility into its future earnings and cash generation capabilities.

Furthermore, the disclosure that the Group is in discussions with its financial partners to amend its loan covenants for December 31, 2025, underscores the financial pressure it is under. Covenants are conditions that lenders place on borrowers, and a potential breach can have serious consequences. While securing an amendment provides temporary relief, it highlights the strain that declining profitability is placing on the company's balance sheet.

As Maisons du Monde moves into 2026, it stands at a critical juncture. “We continue to navigate in a challenging environment and we remain focused on costs and cash,” stated CEO Francois-Melchior de Polignac. The resilience of its physical stores provides a stable foundation, but the success of its turnaround hinges on its ability to rapidly fix its faltering online operations. The company's future will depend on whether its aggressive cost-cutting and new digital leadership can steer the ship through the persistent economic storm.