To receive the Vogue Business newsletter, sign up here.
Matchesfashion officially has a new owner. Frasers Group, the British retail conglomerate owned by Mike Ashley, has snapped up the luxury multi-brand retailer for £52 million from private equity firm Apax Partners. Apax acquired Matches in 2017 from founders Tom and Ruth Chapman in a deal valued at $1 billion.
“Matches has always been a leader in online luxury retail and has incredible relationships with its brand partners,” said Michael Murray, CEO of Frasers, in a statement. “This acquisition will strengthen Frasers’s luxury offering, further deepening our relationships and accelerating our mission to provide consumers with access to the world’s best brands. Whilst the global luxury environment is softer, we are confident that, by leveraging our industry-leading ecosystem, we will unlock synergies and drive profitable growth for Matches.”
The deal comes as deep cracks are showing in the online luxury retail model. Earlier this week, Matches competitor Farfetch was rescued from the brink of bankruptcy by South Korean retail giant Coupang, which acquired the business — once valued at more than £20 billion — for $500 million. Farfetch was in the midst of acquiring a majority stake in rival Yoox Net-a-Porter; with that deal sunk, YNAP’s future is uncertain. Hefty operational expenses have weighed on profits, proving the multi-brand e-commerce space a difficult one to succeed in.
The acquisition will set in motion a new chapter for Matches, which has reported expansive losses over the last three years. Losses increased from £5.9 million in 2020 to £36.6 million in 2021, jumping again to £39.8 million in 2022. Matches attributed the losses to luxury brands reducing their wholesale channels as well as a shift to concession with a key group of brands at the end of 2021.
Apax has been working to rebound the business for over a year. In August 2022, the firm appointed Nick Beighton, the former CEO of Asos, as chief executive — marking Matches’s fourth CEO in six years. Beighton was hired to lead the company’s turnaround, with particular reliance on his experience in digital retail and US expansion. Soon after, Carl Tallents — former head of luxury brands at Frasers — joined Matches as chief commercial officer.
In January 2023, Apax injected £60 million into Matches, its most significant investment in the company since acquisition. Split into £40 million in equity and £20 million in additional debt, the cash injection was coupled with discussions between Matches lenders to agree to extension and contract waivers. At the time, the retailer said that holiday sales had proved strong and that the recovery was underway. Matches’s gross assets were approximately £170 million at 31 January 2023, Frasers revealed in the announcement today.
Frasers Group has been on the acquisition trail for years, often swooping in on retailers and brands that are in distress. Today, it owns a string of names including Sports Direct, House of Fraser, Flannels, Amara, Evans Cycles and Jack Wills. It also has stakes in companies including Hugo Boss, Mulberry, Asos, N Brown, Boohoo and Currys. Its most recent deal, to acquire German sporting goods retailer Sportscheck, fell through at the end of November when the company filed for insolvency.
Frasers has been pursuing an “elevation strategy” over the past five years, which saw it rebrand from Sports Direct International, and invest heavily in opening several new stores for luxury multi-brand fashion retailer Flannels, including a flagship on London’s Oxford Street. Group revenue was up 4.4 per cent to £2.77 billion in the first half of its 2024 fiscal year, ending 29 October 2023.
After the Matches sale completes, Beighton will remain in his role as chief executive and “will work closely with the Frasers team to develop a strategy to successfully build on the underlying strength of the business whilst rapidly unlocking synergies with Frasers”, the group said in a statement.
“Being part of Frasers, with their utter commitment to luxury, will give this business access to greater scale, best-in-class retail expertise and the financial stability it needs to more effectively deliver for our brand partners and our customers,” Beighton said in the release.
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
More from this author:
Meet Kind Regards, the versatile workwear brand for millennial women
Following the Silk Road, Les Benjamins readies for global expansion
