LONDON — Frasers Group has purchased Matches from the private equity firm Apax Partners in a deal valued at 52 million pounds, the retailer confirmed on Wednesday.
The deal will be settled in cash using Frasers’ existing reserves and facilities.
“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,” said Michael Murray, chief executive officer of the retail chain Frasers.
“While 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,” he added.
Matches CEO Nick Beighton will work closely with the team at Frasers to develop a strategy for the business.
“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,” Beighton said.
“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,” he added.
The sale of Matches is a failure for its private equity owner Apax, which purchased the fast-growing retailer in September 2017 for reported valuation of $1 billion following a bidding frenzy by a number of private equity investors, including Permira and KKR.
Despite working closely, for a time, with cofounder Tom Chapman, Apax could not gain traction with the business on a commercial, management or financial scale.
Last year, Apax pinned its hopes on Beighton, the former CEO of fast-fashion e-commerce giant Asos, to restore the business to profitability, and to much higher growth levels.
A tech and finance whiz, Beighton had helped take Asos from 178 million pounds in revenues to nearly 4 billion pounds by the time he left the company last October.
At Matches, he’s been making progress.
“We’re doing a massive cultural reboot and the reason for that is the team has had four different CEOs in as many years — having people anchored in what we’re trying to achieve is really important because we can’t do anything without the people,” Beighton said in an interview with WWD in November.
“Since I arrived, we significantly reduced fixed and variable costs. As we go into Christmas, we’re in good shape and we’ve got the stock levels we need and we’ve got an operational plan that everyone’s behind. We’re expecting the competitors to be quite promotional. We’re ready to react if necessary,” he added.
In the fiscal year ended on Jan. 31, 2023, sales dipped 1.7 percent to 380.1 million pounds, while losses widened to 70.9 million pounds from 39.8 million pounds. Beighton was only a few months into the new job when the results were reported.
Since Apax purchased Matches, it has pumped multimillions into the retailer hoping to power up the business, and sources say it had finally had enough.
Apax’s misunderstanding of the mechanics behind a luxury e-commerce business was reflected in its management choices.
Last year it installed Beighton as the fourth CEO in five years.
The first was Ulric Jerome, the CEO already at the helm of Matchesfashion when the company was sold in 2017.
Jerome is a tech investor and entrepreneur, who, before joining Matches, had founded pixmania.com, an e-commerce pioneer in Europe. Jerome and his team had successfully sold Pixmania to Dixons Retail plc when he joined Matches.
The second was Ajay Kavan, a high-flyer at Amazon who had launched businesses such as Amazon Fresh in the European Union and Japan, and built key strategic partnerships, including with Morrisons supermarkets in the U.K.
He joined shortly before the pandemic struck, and then left after a year.
The third CEO was Paolo De Cesare, a retail veteran who helped turn Matches sales and profits around during his short tenure. He was formerly CEO of Printemps and had served as president of the International Group of Department Stores, the largest industry association of global department stores.
At the time, Luca Solca of Bernstein said he was “very surprised to see Paolo go, as he has steered Matches on a solid relaunch course. I guess this is just the ‘nth’ demonstration — look at the Farfetch share price collapse, or the travails of YNAP — that selling luxury online through a multibrand business concept is very difficult.”
Ashley is the founder of Frasers Group, which is a publicly traded company in England, and remains a controversial figure in British retail.
Known as the Grim Reaper of the high street, Ashley specializes in buying stakes in distressed companies, or brands that sell through his retail chains, often at a steep discount.
Frasers Group purchased Missguided out of administration in June 2022 for 20 million pounds, edging out competitors including Shein, Boohoo and JD Sports, but in October 2023, Shein struck back, buying the Manchester, England-based online brand.
Frasers owns Sports Direct, Flannels, Agent Provocateur, Jack Wills and House of Fraser, which Ashley acquired in 2018, after it had been passed around from one owner to another, including Mohamed Al Fayed, who bought the business in 1985 along with his brothers Ali and Salah.
In 2020 Ashley tried, and failed, to take over Mulberry Group.
