The high street billionaire Mike Ashley has clinched a cut-price deal to buy Matchesfashion, the luxury clothing site, crystallising heavy losses for its private equity backer.
Sky News has learnt that Mr Ashley’s Frasers Group has signed an agreement to take control of Matchesfashion from private equity firm Apax Partners – which sells fashion brands including Balenciaga, Gucci and Valentino – for a headline price of about £50m.
The deal will also include refinancing roughly £20m in debt owed by Matchesfashion, which also drew tentative takeover interest from Next.
The deal will be announced later on Wednesday.
Matchesfashion has struggled under a succession of leadership teams prior to the arrival of Nick Beighton, the former ASOS chief, last year.
Under Mr Beighton, the platform’s performance has improved markedly with a renewed focus on operational efficiency and the sharpness of its marketing.
It has, nevertheless, been caught out by the sharp slowdown in global luxury goods sales which is affecting retailers across the sector.
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Sale a sign of severe industry pain
Apax is said to have invested as much as £600m of its investors’ money in Matchesfashion since buying the site from its founders six years ago.
Its impending cut-price sale underlines the severe pain being felt in the industry, just three years after many luxury retailers saw sales and company valuations boom during the pandemic.
Farfetch, the New York-listed but British-based fashion platform, this week succumbed to an insolvency process in a pre-pack administration that will see it taken over by South Korea’s Coupang.
The takeover of Matchesfashion will deliver a significant boost to Frasers’ “elevation” strategy, which is now spearheaded by the company’s chief executive – and Mr Ashley’s son-in-law – Michael Murray.
Mr Murray said at Frasers’ most recent results presentation that the strategy, which is partly being implemented through its Flannels brand, is paying off.
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End of disaster for previous owners
For Apax, the ownership of Matchesfashion has been a disaster.
Its most recent equity injection, worth £20m, was delivered in June, as part of a previously pledged £60m investment.
The company also said last month that it had started discussions with its shareholders and lenders about the renewal of an asset-backed lending facility due next summer.
Matchesfashion began life as a single shop in Wimbledon, southwest London, more than 30 years ago and now boasts over 100 million annual visits to its website and app.
It features more than 500 established and ‘new generation’ designers, delivering to over 170 countries.
A syndicate of lenders led by a KKR credit fund is said to be first in line to receive the proceeds from a sale.
Teneo Financial Advisory has been advising the company on the process to secure new investment.
Mr Beighton was drafted in to replace Paolo De Cesare as Matchesfashion’s chief executive, who joined the company as chief executive just ten months earlier.
The former ASOS chief’s arrival made him the fourth boss of Matches in less than three years.
In November 2021, its accounts flagged “material uncertainty” over its future without an improvement in its trading performance.
Mr Beighton spent more than a decade at ASOS, initially as chief financial officer before becoming CEO in 2015.
He helped grow the company from £178m in revenue and 150 people when he joined, to sales of £3.9bn and a workforce of 15,000, including warehouse staff, when he left.
Apax, Matchesfashion and Frasers declined to comment.
