Frasers Group has bought Matches Fashion for £52 million as it continues its push into the luxury retail sector.
The FTSE 100 conglomerate that owns Sports Direct and House of Fraser has acquired the online retailer from Apax, the private equity firm. The ecommerce business made a loss of £33.5 million in the last financial year and Frasers said its gross assets had been valued at about £170 million in January this year.
Michael Murray, chief executive of Frasers, said the luxury industry was “softer” than it had been previously, but the deal would help to generate profitable growth at Matches. “This acquisition will strengthen Frasers’ luxury offering, further deepening our relationships and accelerating our mission to provide consumers with access to the world’s best brands,” he said.
Murray, 34, who has taken over from Mike Ashley, 59, his father-in-law, as the boss of Frasers, has sold several non-core investments, such as Bob’s Stores and Eastern Mountain Sports, and has started to buy distressed companies and stakes in listed retailers, including AO World, Currys, Asos and Boohoo.
Matches generates annual revenue of more than £350 million, but the company has been lossmaking for several years. The luxury retailer brought in Nick Beighton, 55, the former chief executive of Asos, to lead its turnaround last year and since then the business has focused on cost-cutting and improving its operations.
Apax bought Matches six years ago for an undisclosed sum and is said to have invested about £600 million in the business. The sale comes after Farfetch, a rival website, fell into administration and was bought by Coupang, the South Korean ecommerce group.
Beighton said: “Since I joined Matches last year, we have made good progress, sharpening our brand and product curation and improving the day-to-day operations of the business.
“As a result, we have seen a resilient trading performance despite the challenging economic backdrop. 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.”
Shares in Frasers Group rose 9p, or 1 per cent, to 938p.
