- Clothing website bought by Mike Ashley’s retail empire for £52m
- Matches was founded by husband and wife Tom and Ruth Chapman in 1987.
Matches Fashion has fallen into administration less than three months after its acquisition by Frasers Group.
The clothing retailer was bought by Mike Ashley’s retail empire, owner of flannels Sports Direct and Evans Cycles, for £52m in December from private equity firm Apax Partners.
Frasers said at the time that the purchase would help develop its lift-up strategy, which includes greater investment in online operations, targeting wealthier consumers and expanding its luxury retail offering.
Acquisition: Matchesfashion was bought by Mike Ashley’s retail empire for £52 million in December from private equity firm Apax Partners.
However, the Derbyshire-based company said Matches remains loss-making and has “consistently missed” certain business plan targets since the acquisition.
He added that Matches bosses believed “too many changes” were needed to restructure the business and that ongoing funding needs would be “far in excess of the amounts the group considers viable”.
Matches was founded as a single shop in Wimbledon Village in 1987 by husband and wife Tom and Ruth Chapman, who reportedly named it after the former’s 40-cigarette-a-day habit.
Often considered a rival to Net-a-Porter, the company sells hundreds of luxury brands in its stores and website, including Prada, Gucci, Balenciaga, Christian Louboutin, Stella McCartney and its own brand, Raey.
The Chapmans eventually sold Matches to Apax for £400m in 2017, just after moving their headquarters from Clapham Junction to The Shard skyscraper.
In recent years, the company has struggled to remain profitable amid Brexit-related uncertainty, lockdown restrictions depressing demand for expensive clothing, and a global slowdown across the luxury sector.
Following a series of short-lived chief executives, former ASOS boss Nick Beighton arrived in August 2022 and launched a three-year turnaround plan focused on attracting a younger clientele and “getting the fundamentals right”.
However, in its most recent annual result, Matches reported an operating loss of £67.2m for the 12 months to January 2023, compared with a loss of £37.5m in the year. last year.
Victoria Scholar, chief investment officer at Interactive Investor, said the company’s collapse “shows how even the e-commerce sector, which is relieved of many traditional cost pressures, still faces immense financial stress amid weak global growth.” “.
He added: ‘Rival Net A Porter also suffered losses in the first half of last year. The lack of continuity in management, with a series of rapid and successive changes of chief executives in recent years, has not helped Matches Fashion either.’
Frasers Group shares fell 1 per cent to £7.98 on Friday morning, although they have still tripled in the last five years.
