Matchesfashion, a renowned luxury clothing retailer, is undergoing significant restructuring following its acquisition by Mike Ashley's Frasers Group. Frasers, having purchased Matches just three months prior for £52 million, has called in administrators after Matches consistently failed to meet its business plan targets and incurred losses. This move has resulted in the termination of 273 jobs, which constitutes more than half of Matches' workforce.
The troubles facing Matchesfashion are symptomatic of broader challenges within the luxury goods market. Despite specializing in high-end brands like Gucci and Dr Martens and boasting a strong international presence with deliveries to 150 countries outside the UK, Matches has experienced a sharp decline in demand over the past year. This decline has been attributed to well-publicised pressures on discretionary spending, exacerbated by the high inflation and interest rates prevailing in the macroeconomic environment.
Frasers Group, which owns the luxury streetwear chain Flannels among other retail brands, remains committed to the high-end retail market despite Matches' struggles. However, Frasers deemed the continued funding requirements to support Matches to be far beyond what it considered viable. As a result, the decision was made to put Matches into administration.
Matchesfashion's trajectory mirrors Frasers' longstanding strategy of acquiring distressed brands at discounted rates to enrich its retail portfolio. Previous acquisitions by Frasers include renowned names like Jack Wills, Gieves & Hawkes, and Evans Cycles, alongside online fast-fashion brands such as Missguided and I Saw It First.
