Matches: Is there a future for the bust luxury retailer?

Retail giant Frasers Group snapped up luxury fashion retailer Matches from private equity firm Apax Partners in a £52m deal in December last year.

At the time, Frasers said it saw an opportunity to develop its “elevation strategy” as well as build its luxury offering. This currently exists in the form of Flannels, stocking the likes of Gucci, Boss, Saint Laurent and Tom Ford, which sits alongside its plethora of sports, athleisure and homeware brands.

Despite Frasers saying then that Matches boss Nick Beighton would continue to work closely with the team post-acquisition, fast-forward three months and the retail giant announced it had put the business into administration.

With nearly 300 job losses and millions of pounds owed to brands and suppliers, speculation swirled about the future of the marketplace. 

Last week, Frasers said that it had acquired “certain intellectual property assets only” of Matches from the retailer’s administrators, which is understood to include the Matches trademark, domain names and data. With an eye to what’s next for the luxury name, Retail Week explores what the future holds for Matches.

A luxury lifeline 

When the administration announcement hit the headlines, Frasers said it remained “committed” to the luxury market and its brand partners. 

So, having since acquired some of its intellectual property assets, is there still scope for Frasers to integrate Matches into its existing offer? 

Shore Capital director Clive Black says that is likely but won’t be an easy task.

He explains: “With Frasers taking the IP, it’s likely to be a case of Matches re-emerging in some form on the Frasers platform online. 

“However, the track record of IP being bought and something coming out on the other side isn’t compelling.”

Black refers to deals including Asos taking over Topshop and Boohoo acquiring the IP of Debenhams. He adds: “There’s not a huge amount [of retailers and brands] that are rocking the boat in the online world from those transactions.”

With Matches struggling to find a place to fit within Frasers Group’s portfolio, only time will tell if, after months of speculation, the two brands will merge and be stronger together or go their separate ways.

Too little, too late 

Former Matches boss Nick Beighton called the decision to pull the plug unnecessary, suggesting it may have been a hasty business decision on Ashley’s behalf.

“Frasers did what Frasers did,” he told the Retail Technology Show last month. “It’s their choice as shareholders. It wasn’t necessary, in my opinion.

“It’s no secret that Matches was struggling for four or five years. We took it and I brought a team in because it was a great British ecommerce business. We were making progress, starting to trade well and doing great stuff.” 

Despite Beighton’s undeniable belief in the business, GlobalData associate analyst Alice Price says: “I think it’s [the decision to purchase the IP] more to maximise returns from the administration. Given how early they acquired it and then put it into administration, I think it’s lessons learned for Frasers that it doesn’t have the capability or the want to invest the time and money into making it profitable again.”

“Luxury businesses maintain this air of exclusivity and allure. Once that is tarnished, it’s harder to get back”

Alice Price, GlobalData

She adds that with a reputation in disrepair, an attempt to redeem Matches in the luxury sphere is a tough ask.

“Especially when it comes to luxury, businesses maintain this air of exclusivity and allure,” she says. “Once that is tarnished for a luxury player, it’s harder to get back. 

“As a marketplace specifically, to get the brands to work with you again in the future is hard.” 

While Price predicts that the economic environment for luxury players in the UK will likely improve when the impact of easing inflation is felt, she adds that the luxury slowdown isn’t reversing yet.

As luxury retailers focus on their direct-to-consumer channels and big names such as Prada, Gucci, Burberry, Max Mara and others are owed around £36m as a result of Matches’ demise, it might be too little, too late to return the business to what it once was.