In a statement, Frasers Group said Matches had “continued to make material losses” despite Frasers Group’s support and the brand's management team attempting to find ways to “stabilise” the online clothing platform.
According to Sky News, several brands terminated their relationship with the Matches site amid heavy losses.
It became clear to the fashion conglomerate that too much change would be required to restructure, and the ongoing financial needs exceeded what Frasers Group deemed feasible. In light of this, the directors of Matches have decided to put the online fashion platform into administration.
Alice Price, apparel analyst at GlobalData, said the news suggests Frasers underestimated the scale of investment and time required to turnaround the Matches business.
Price said: "Although Frasers Group successfully steered luxury retailer Flannels back to profit after acquiring it in 2017, Matches' online specialism would have presented Frasers with unfamiliar challenges that it would have lacked the expertise or capacity to easily resolve, due to most of its portfolio being multichannel. Selling luxury online is particularly tough, given shoppers generally prefer to try on and see expensive products in person before purchasing. Supplier relations had also begun to sour under Frasers’ ownership, with the fashion giant reportedly seeking sizeable discounts, while some brands reported overdue payments, resorting to termination of contracts."
Frasers has reiterated its commitment to the luxury market and its brand partners, despite the development.
Sky News also suggests Frasers is likely to seek to retain control of Matches through a pre-pack insolvency deal.
However, Price added that even if Frasers uses the administration to restructure the business and reduce operational costs, the development is still a blow for online luxury marketplaces.
Price said: "As well as Matches’ demise, Mytheresa and Yoox Net-a-Porter continue to report ailing demand, and Farfetch was acquired by Korean e-commerce giant Coupang in December 2023 for a fraction of its former £20bn valuation.
“Luxury marketplaces also remain affected by the wider slowdown in luxury demand, especially in Europe and the US, as aspirational shoppers continue to reign in spend amid ongoing inflationary pressures. Designer brands have also begun reducing their reliance on wholesale partners, instead investing in their direct-to-consumer businesses to garner greater control over their brand images and uphold their exclusive allure. This has caused marketplaces to suffer dwindling customer acquisition, with Matches resorting to discounting to entice sales, which in turn impacted its margins as well as consumer perceptions.”
Frasers Group acquired Matches for £52m ($66.6m), along with any debts owed by the retailer, in December 2023 from Apax Partners. The fashion conglomerate believed the deal would “strengthen its luxury offer” and deliver a significant boost to Frasers' elevation strategy.
Two months ago the retail group acquired the assets and IP of CrossFit and fitness performance brands WIT Fitness as part of wider plans to become a world-leading sports retailer.
Frasers Group‘s head of acquisitions James France told Just Style at the time: “We are pleased to have acquired the assets and IP of WIT Fitness, a globally recognised CrossFit and fitness performance brand.”
Reports started flying in the same month that Frasers Group was considering buying up to 20 stores from the collapsed Unlimited Sports Retail chain in the Netherlands including those under the Perry Sport, Aktiesport and Sprinter brands.
Perry Sport and Aktiesport were previously owned by rival British retail group JD Sports but were declared bankrupt in December 2023.
