The luxury clothing retailer Matchesfashion is cutting 273 jobs – more than half its workforce – after its new owner Mike Ashley’s Frasers Group called in administrators.
Matches was acquired by Frasers three months ago for £52m in cash from the private equity firm Apax Partners. Frasers said it was not willing to fund a turnaround after the business had “consistently missed its business plan targets” and made losses.
Specialising in luxury labels, 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 stores.
Benji Dymant, joint administrator from Teneo who was appointed on Friday, said immediate redundancies had been made so that the company could continue to trade while sale 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, as a result of well-publicised pressures on discretionary spend, stemming from the high inflation and high interest macro environment,” he said.
“Since Frasers’ acquisition of Matchesfashion in December 2023 and an injection of additional funding, trading has continued to deteriorate, increasing the funding requirements of the business. This ultimately has resulted in the directors taking the difficult decision to place the company into administration.”
The problems at Matches come amid difficulties in the wider luxury market, which has slowed as even wealthier families have found themselves affected by the rising costs of energy bills and higher interest rates on mortgages and loans. Online specialists have been hit particularly hard.
Retailer Farfetch agreed a controversial rescue deal with the South Korean e-commerce giant Coupang via a prepack administration in January. Richemont’s Yoox Net-a-Porter, which had been lined up for sale to Farfetch, is heavily loss-making.
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.
Frasers, which owns the Flannels luxury streetwear chain, 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 has a long history of buying often distressed sports, luxury and related brands at low prices to add to its large retail portfolio. In recent years has snapped up Jack Wills, Gieves & Hawkes, Evans Cycles and Game as well as snapping up the online fast-fashion brands Missguided and I Saw it First.
Last week, it emerged that Frasers had acquired Wiggle, the online retailer of cycling and running gear that collapsed last October, for an amount less than £10m.
Victoria Scholar, 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.”
