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What’s happened
Frasers Group has agreed to acquire the intellectual property (IP) assets of Matches, including its company name, trademark and database.
Frasers has licensed this IP to the administrator, Teneo Financial Advisory, to allow it to continue operating Matches for as long as possible. The amount paid for the IP is undisclosed.
Why it matters
Teneo revealed last week that 11 offers had been made to acquire Matches and/or certain assets within the business. Vogue Business understands that the deal with Frasers — which owned Matches when it was placed into administration in March — was considered to be the best one on the table.
As Matches’s biggest single creditor, it is in Frasers Group’s interests to maximise the returns from the administration process (Matches owes Frasers Group £209.4 million). The IP deal allows Matches to continue trading, in the hopes of clearing as much of its holding stock as possible.
That does not mean that brands and suppliers will get more money back. In reality, very little has changed.
More than 540 luxury brands are owed a total of £35.9 million from Matches for stock, based on current estimates. As previously reported, they are still unlikely to recoup what they are owed. If they get any of that back, the repayments are expected to amount to less than a penny back for every pound owed — and this depends more on the sale of Matches’s property assets than it does the sell-through of stock.
Frasers has not commented on what it plans to do with the IP assets once the administration process is complete. There are numerous potential motivations for buying the IP beyond maximising the returns from the administration process, says Stephen Sidkin, partner at law firm Fox Williams. Frasers could wait until the luxury retail market improves and then look to sell the assets to a third party for a profit, he explains. Or it could keep the IP to ensure a third party does not set up a business under the Matches name. It could then redirect consumers that search for “Matches” or “Matches Fashion” online to the website of Frasers-owned luxury retailer Flannels.
Alternatively, Frasers could set up a new online business under the Matches name. However, Frasers, which ploughed £33 million into the loss-making retailer after acquiring it in December, has already made it clear that it has no appetite to throw good money after bad. (Frasers Group declined to comment for this article.)
“I anticipate that — after the administrators have sold off the remaining stock, addressed creditors and paid their own fees — what was the Matches company will be wound up,” says Sidkin.
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