In a statement, Frasers Group said the Matches deal would “strengthen its luxury offer”, as it announced it would acquire 100% of the shares of a group of six companies, as well as any debts owed by the retailer.
Matches is an online luxury fashion business, offering a selection of menswear and womenswear from more than 450 designers. The retailer delivers to 150 countries outside the UK and is said to generate most of its revenue internationally.
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Frasers Group says it will pay £52m ($65.8m) in cash for Matches, using its existing reserves and facilities.
Matches has made losses in recent years, with an LBITDA of £33.5m for the year to 31 January 2023, although it still had around £170m in gross assets.
The deal is now expected to cement a substantial loss for previous owners private equity firm Apax Partners who have allegedly invested £600m of investor funds into the venture since acquiring it from its founders six years ago.
Frasers says the deal will further develop its “elevation strategy”, as it moves into the luxury sphere, alongside its Flannels brand.
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By GlobalDataBefore the announcement, Lord Wolfson, owner of UK retailer Next, was also reported to have expressed interest in acquiring the luxury clothing platform.
In recent months, Frasers has also been acquiring increasing shares of UK based online retailers Boohoo Group and Asos.
Michael Murray, CEO at Frasers Group, said: “Matches has always been a leader in online luxury retail and has incredible relationships with its brand partners. This acquisition will strengthen Frasers’ luxury offering, further deepening our relationships and accelerating our mission to provide consumers with access to the world’s best brands. Whilst the global luxury environment is softer, we are confident that, by leveraging our industry-leading ecosystem, we will unlock synergies and drive profitable growth for Matches.”
Matches’ CEO Nick Beighton, formerly CEO of ASOS, added: “Since I joined Matches last year, we have made good progress, sharpening our brand and product curation and improving the day-to-day operations of the business. As a result, we have seen a resilient trading performance despite the challenging economic backdrop. Being part of Frasers, with their utter commitment to luxury, will give this business access to greater scale, best-in-class retail expertise and the financial stability it needs to more effectively deliver for our brand partners and our customers.”
GlobalData apparel analyst Louise Deglise-Favre previously told Just Style Matchesfashion would help to diversify Fraser’s portfolio across price positionings.
Deglise-Favre said: “Recent improvements under former Asos chief, Nick Beighton’s leadership are highly encouraging for the retailer, making it a potentially highly lucrative opportunity for Frasers if it manages to put its performance back on track,” added Deglise-Favre.
