Sources close to the matter have allegedly told news publication Sky News the deal, which could be finalised "within days", is part of Frasers Group's strategic expansion plans.
The city insiders suggested Frasers Group is one of the select few parties that recently submitted offers for Matchesfashion, however Lord Wolfson, the owner of UK retailer Next is also reported to have expressed interest in acquiring the luxury clothing platform.
The proposed acquisition, if successful, is anticipated to cost Frasers Group over £50m ($63m).
If the deal goes ahead it is expected to cement a substantial loss for private equity firm Apax Partners who have allegedly invested £600m of investor funds into the venture since acquiring it from the founders six years ago.
Sky News also reported that insiders familiar with the negotiations believe the impending deal will be financially sound.
GlobalData apparel analyst, Louise Deglise-Favre told Just Style Matchesfashion would help to diversify Fraser's portfolio across price positionings.
Deglise-Favre told Just Style she believes the acquisition would help Frasers Group "further strengthen its premium and luxury proposition," due to it successfully elevating luxury retailer, Flannels to a more "premium positioning."
She went on to say that Matchesfashion's lack of direction over the past few years has left it in a "precarious position."
"However, the 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.
According to Sky News, Beighton's renewed focus on operational efficiency and targeted marketing, Matchesfashion is said to have shown improvement in its overall performance.
Matchesfashion declined Just Style's request to confirm the news whilst Frasers Group, Apax Partners and Next had not responded to our request for comment at the time of going to press.
Frasers Group's chief executive officer Michael Murray said at the time: "Our long-term ambitions for our Premium Lifestyle business remain unchanged although it is likely that progress will remain subdued for the short to medium term in the face of a softer luxury market however, we continue to invest with confidence in our unique proposition."
