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 £52million in December from the private equity firm Apax Partners.
Frasers said at the time that the purchase would help develop its elevation strategy, which includes greater investment in online operations, targeting more affluent consumers, and expanding its luxury retail offering.
Takeover: Matches Fashion was bought by Mike Ashley’s retail empire for £52million in December from the private equity firm Apax Partners
However, the Derbyshire-headquartered company noted Matches is still lossmaking and has ‘consistently missed’ certain business plan targets since the takeover.
It added that Matches’ bosses believed ‘too much change’ was needed to restructure the business and that continued financing requirements would be ‘far in excess of amounts that the group considers to be viable.’
Matches was founded as a single store in Wimbledon Village in 1987 by married couple Tom and Ruth Chapman, who reportedly named it after the former’s 40-a-day cigarette habit.
Often considered a rival to Net-a-Porter, the business sells hundreds of luxury brands across its shops and website, such as Prada, Gucci, Balenciaga, Christian Louboutin, Stella McCartney and its own label, Raey.
The Chapmans eventually sold Matches to Apax for £400million in 2017, just after moving its headquarters from Clapham Junction to The Shard skyscraper.
In recent years, the company has struggled to remain profitable amid Brexit-related uncertainty, lockdown curbs depressing demand for expensive clothes, and a global slowdown across the luxury sector.
Following a host 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 a £67.2million operating loss for the 12 months ending January 2023, compared to a £37.5million loss the previous year.
Victoria Scholar, head of investment at Interactive Investor, said the firm’s collapse ‘shows how even the e-commerce sector, which is relieved of many bricks and mortar cost pressures, is still facing immense financial stress amid the weak global growth backdrop.’
She added: ‘Its rival Net A Porter similarly struggled with losses in the first half of last year. A lack of management continuity, with a series of quick-successive CEO changes in recent years, hasn’t helped Matches Fashion either.’
Frasers Group shares were 1 per cent down at £7.98 on Friday morning, although they have still tripled over the past five years.
