The luxury clothing retailer Matchesfashion is to enter administration after its new owner, Mike Ashley’s Frasers Group, said it was not willing to fund a turnaround.
Matches was acquired by Frasers three months ago for £52m in cash from the private equity firm Apax Partners but the business has “consistently missed its business plan targets” and made losses, Frasers said.
The business, which sells goods online and has three London stores, stocks a number of designer ranges including Prada and Gucci, and generates most of its revenue internationally, delivering to 150 countries outside the UK.
Frasers said in a statement: “Whilst the Matches management team has tried to find a way to stabilise the business, it has become clear that too much change would be required to restructure it.”
Frasers added that the continued funding requirements to support Matches would be “far in excess of amounts” that it would consider to be “viable”.
“In the light of this, Frasers has been informed that the directors of Matches have taken the decision to put the Matches group into administration,” it said.
The move raises uncertainty over the future of Matches’ staff. The company employs about 500 people.
Frasers said it remained committed to the high-end retail market. When it acquired Matches in December, it said that the deal was an opportunity to strengthen Frasers’ luxury offering.
Matches was founded in 1987 as a boutique in the London suburb of Wimbledon by husband and wife Tom and Ruth Chapman. The Chapmans, who held a majority stake, received about £400m after selling Matchesfashion.com to private equity investors in 2017 after a deal valuing the business at £800m.
Frasers Group, which was founded by the high street tycoon Ashley and is now led by his son-in-law Michael Murray, started as a small store in Maidenhead in 1982.
Sports Direct International was rebranded Frasers in 2019 after Ashley rescued House of Fraser in August 2018 and pledged to make it “Harrods of the high street”.
In recent years, Frasers has been acquisitive as it has expanded its luxury business through its upmarket brand Flannels and has struck deals such as buying the bespoke tailor Gieves & Hawkes in 2022.
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Frasers has a long history of buying sports, luxury and related brands to add to its large retail portfolio and in recent years has acquired Jack Wills, Evans Cycles and Game as well as snapping up the online fast-fashion brands Missguided and I Saw it First.
Last week, it emerged Frasers had acquired Wiggle, the online retailer of cycling and running gear that collapsed last October, for an amount less than £10m.
Frasers said at the time of the acquisition that Matches, which had gross assets of around £170m as at January 2023, had been loss-making for some years and adjusted losses for the year ended 31 January were £33.5m.
Victoria Scholar, the head of investment at interactive investor, said: “The financial woes facing Matchesfashion highlight the broader slowdown in the luxury goods market. High-end luxury demand has been waning amid a weak post-Covid recovery in China as well as broader global macroeconomic pressures.”
