Dive Brief:
- Matches has been put into administration following the Frasers Group’s purchase of it in December 2023, according to a Frasers Group statement last week.
- Since the acquisition, Matches has “consistently missed its business plan targets” and despite support from Frasers, it “continued to make material losses,” the statement read.
- When Frasers acquired Matches for 52 million pounds — about $66.6 million at current exchange rates — last year, it said the deal would help strengthen its luxury offering.
Dive Insight:
In last week’s statement, Frasers, which also owns Flannels, Agent Provocateur and House of Fraser, said it “remains committed to the luxury market and its brand partners.”
At the time of the initial deal, Frasers CEO Michael Murray said the group was confident it could drive profitable growth for Matches, despite what he called a “softer” global luxury market.
However, in its statement last week, the Frasers Group said Matches was missing its financial targets.
“Whilst MATCHES' management team has tried to try to find a way to stabilise the business, it has become clear that too much change would be required to restructure it, and the continued funding requirements would be far in excess of amounts that the Group considers to be viable,” the statement said.
Exact figures for material losses related to Matches haven’t been released. Frasers’ next earnings report containing full-year results is scheduled for July.
Matches had been experiencing loss in recent years, as noted in the acquisition filing, particularly during the pandemic. The business was acquired by Apax in 2017, and underwent several CEO changes since, including one in 2020, one in 2021, and another in 2022.
While Matches is an e-commerce business that generates most of its revenue internationally, it also has a retail component with three locations in London that sell menswear and womenswear.
Meanwhile, Frasers earned 2.77 million pounds in revenue for the first half of its fiscal year, reported in December, which represented a 4.4% year-over-year increase.
