Luxury clothing brand Matchesfashion enters administration

Luxury clothing retailer Matchesfashion is cutting 273 jobs – more than half its workforce – after new owner Mike Ashley's Frasers Group called in administrators.

Matches was acquired by Frasers three months ago for £52m in cash from private equity firm Apax Partners. Frasers said it was unwilling to fund a turnaround after the company "systematically missed its business plan targets" and posted losses.

Specializing in luxury brands luxury goods, from Gucci to Dr Martens., online and through three London stores, Matches generates most of its revenue internationally, delivering to 150 countries outside the UK. It employs 533 people at its head office and in stores.

Benji Dymant, Teneo's co-administrator appointed on Friday, said immediate layoffs were made so the company could continue. to be negotiated as sales discussions progressed alongside an assessment of its future structure.

“Like many luxury fashion retailers, Matchesfashion has experienced a sharp decline in demand over the last year, due to a result of high-profile pressures on discretionary spending, stemming from a macroeconomic environment of high inflation and high interest rates,” he said.

“Since the acquisition of Matchesfashion by Frasers in December 2023 and following the injection of additional funds, trading has continued to deteriorate, increasing the financing needs of the business. This ultimately led to the directors taking the difficult decision to place the company into administration. »

Matches' problems come amid difficulties in the broader luxury market, which has slowed even the wealthiest families to find themselves affected by the rise energy bill costs and rising interest rates on mortgages and loans. E-commerce specialists have been particularly hard hit.

Retailer Farfetch has reached a controversial rescue deal with South Korean e-commerce giant Coupang via pre-pack administration in January. Richemont's Yoox Net-a-Porter, which was to be sold to Farfetch, is heavily loss-making.

Frasers said in a statement: "While the management team of Matches tried to find a way to stabilize the business, it became clear that too many changes would be necessary to restructure it."

Frasers added that the financing requirements "In light of this, Frasers was informed that the directors of Matches have taken the decision to place the Matches Group into administration," he said.

Frasers, owner of luxury streetwear clothing chain Flannels, said that he remained committed to high-end retail. walk. When it acquired Matches in December, it said the deal was an opportunity to strengthen Frasers' luxury offering.

Matches was founded in 1987 in as a boutique in the London suburb of Wimbledon by husband and wife Tom and Ruth Chapman. The Chapmans, who owned a majority stake, received around £400 million after selling Matchesfashion.com to private equity investors in 2017 following a deal valuing the business at £800 million.

Frasers has a long history of buying often struggling sports, luxury and related brands at low prices to add to its extensive retail portfolio. In recent years, Jack Wills, Gieves & Hawkes, Evans Cycles and Game have been acquired, as well as online fast fashion brands Missguided and I Saw it First.

Latest Last week it emerged that Frasers had acquired Wiggle, the online cycling and running clothing retailer which collapsed last October, for less than £10m.

Victoria Scholar, head of investment at Interactive Investor, said: “The financial difficulties Matchesfashion is facing highlight the wider problem...