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Almost 300 Matchesfashion employees lost their jobs on Friday after Frasers Group put the UK luxury clothing retailer into administration less than three months after buying it.
Matches, which Mike Ashley’s Frasers bought in December for £52mn, sells about 600 high-end designer brands such as Gucci, Tom Ford and Saint Laurent. It was the latest upmarket retailer to fall victim to a global slowdown in luxury goods, according to administrators at Teneo, following the implosion of rival Farfetch late last year.
A total of 273 staff were dismissed to allow the business to trade through administration as insolvency practitioners sought potential buyers for the brand. Matches employed 533 staff across its head office and three stores in London and primarily sells its goods online in 170 countries.
“Like many luxury fashion retailers, Matchesfashion has experienced a sharp decline in demand over the past year, as a result of well-publicised pressures on discretionary spend, stemming from the high inflation and high interest macro environment,” said Benji Dymant, joint administrator.
Since Frasers bought Matches, trading has continued to deteriorate despite a cash injection, Dymant added, and it became apparent the retailer would require more money to stay afloat, subsequently leading to administration.
“The joint administrators will continue to assess the appropriate structure for the business as sale discussions progress,” said Teneo in a statement.
Alice Price, apparel analyst at GlobalData, said Frasers’ decision suggested it underestimated the scale of investment and time required to oversee a turnaround.
“Selling luxury online is particularly tough, given shoppers generally prefer to try on and see expensive products in person before purchasing,” she added.
Late on Thursday, Frasers said that Matches had “consistently missed its business plan targets and, notwithstanding support from [Frasers], has continued to make material losses”. But Frasers, which also owns upmarket chain Flannels in the UK, is still interested in the brand, according to a person familiar with the situation.
It acquired the brand from private equity group Apax Partners, which bought it at a reported $1bn valuation in 2017.
Matches was founded by husband and wife Tom and Ruth Chapman in 1987 as a multi-brand boutique in London and it grew into a pioneering ecommerce business.
It posted a pre-tax loss of £70mn on sales of £380mn in the year to January 31 2023, according to its most recent filings at Companies House.
