Mike Ashley’s Frasers Group says Matches to enter administration

Mike Ashley’s retail group says the designer brand platform it bought in December is losing too much money.
Mike Ashley's Frasers Group says Matches to enter administration
Grab of the Matches websiteMatchesFashion.com

Designer brands platform Matches is being put into administration less than three months after it was bought by Mike Ashley’s Frasers Group.

The company spent £52m on the loss-making retailer in December and had planned to turn it around.

But Frasers, which has been adding more upmarket brands to its original Sports Directs-focused business, said Matches was making unsustainable losses.

“Too much change would be required to restructure it,” the group said.

Matches, which sells items from established designers such as Balenciaga, Gucci and Prada, is a UK business but makes most of its money selling overseas.

It was founded more than 30 years ago by husband-and-wife team Tom and Ruth Chapman from their shop in Wimbledon, south-west London, before moving online.

The Chapmans sold a majority stake in the business to private equity group Apax Partners in 2017, who then sold the business on to Frasers Group.

Media reports suggested the company had been pushing for discounts from its suppliers in recent weeks.

“It appears that the issues at Matches were more significant than Frasers first thought,” said Catherine Shuttleworth, chief executive of retail analysis firm Savvy.

“Consumer confidence remains fragile and even luxury clothing shoppers are changing purchase behaviour. We know that 74% of shoppers are cutting back on the number of clothes that they buy.”

In a statement Frasers Group said the business had “consistently missed its business plan targets” and was making “material losses”.

“The continued funding requirements would be far in excess of amounts that the Group considers to be viable,” it said.

However, Frasers said it remained committed to the luxury market.

Two years ago Mr Ashley, who founded Sports Direct and established its reputation with cut-price deals on sports goods, handed the reins to his son-in-law, Michael Murray.

Mr Murray has taken a different tack targeting “new, luxury, aspirational” customers, and bought 60 Flannels stores, which sell designer clothes.

The Group now includes Jack Wills, Sofa.com, Game, Evans Cycles, Gieves and Hawkes, and House of Fraser.

Mr Ashley remains the majority shareholder.

Source: bbc.com

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