- Frasers Group negotiates Matchesfashion acquisition
- Apax Partners faces significant losses
- Luxury retailer’s future uncertain
Advanced negotiations are underway between Mike Ashley’s Frasers Group and the upscale apparel website in a transaction that would cause buyout firm Apax Partners to incur significant losses.
Mike Ashley, a billionaire from the high street, is negotiating the purchase of the luxury clothing website Matchesfashion in a transaction that would result in significant losses for Apax Partners, the site’s private equity backer since 2017.
Mr Ashley’s Frasers Group is currently engaged in extensive negotiations regarding a transaction that could result in the company acquiring Matchesfashion, an online retailer specialising in fashion labels such as Balenciaga, Gucci, and Valentino, in a matter of days.
According to city sources, Frasers was one of a limited number of entities that submitted offers earlier this week.
Next, led by Lord Wolfson, also reportedly demonstrated interest in acquiring Matchesfashion.
According to an insider, Frasers would likely pay more than £50 million for the company, which has struggled under a succession of leadership teams since the appointment of Nick Beighton, the former ASOS CEO, last year, should the transaction go through.
Pundits assert that the transaction would be solvent.
The platform’s performance has significantly improved under the leadership of Mr Beighton, owing to a renewed emphasis on operational efficiency and the precision of its marketing.
The significant deceleration in worldwide sales of luxury products has adversely affected it, impacting retailers in the entire industry.
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MatchesFashion has purportedly received up to £600 million in investor capital from Apax since the company acquired the website from its proprietors six years ago.
Its imminent discount sale emphasises the intense suffering being endured by the sector precisely three years after numerous luxury retailers experienced a surge in sales and company valuations amidst the global health crisis.
This weekend, the British-based fashion platform Farfetch, listed in New York, is in a mad dash to raise hundreds of millions of dollars to ensure its continued existence.
The alleged failure of discussions with Apollo Global Management jeopardises the company’s future.
The acquisition of MatchesFashion would substantially advance Fraser’s ‘elevation’ strategy, which is currently led by Michael Murray, the company’s CEO and the son-in-law of Mr Ashley.
Mr Murray stated at Frasers’ most recent results presentation that the strategy is bearing fruit, partly because of the Flannels brand.
Apax’s acquisition of Matchesfashion has proven to be a catastrophic venture.
Its most recent £20 million equity injection was delivered in June, constituting a £60 million investment that had been previously pledged.
Additionally, the company announced last month that discussions had begun with its lenders and shareholders regarding renewing an asset-backed lending facility scheduled to expire next summer.
Established over three decades ago as a solitary establishment situated in Wimbledon, southwest London, Matchesfashion has since garnered more than one hundred million visitors per year to its website and mobile application.
Over 500 established and “new generation” designers are at its disposal, and the company ships to more than 170 countries.
A syndicate of lenders headed by a KKR credit fund reportedly receives preference to receive the sale proceeds first.
Teneo Financial Advisory is advising the company on obtaining new investments.
Instead of Paolo De Cesare, who had only been with the organization for a decade, Matchesfashion appointed Mr. Beighton as CEO. De Cesare had assumed the position of CEO.
With his appointment, the former ASOS CEO became the fourth manager of Matches in less than three years.
Its accounts reported “material uncertainty” regarding its future in November 2021 despite the company failing to enhance its trading performance.
Mr. Beighton assumed the role of CEO of ASOS in 2015, having served as its chief financial officer for over a decade.
When he departed, the company had increased from £178 million in revenue and 150 employees when he joined to £3.9 billion in sales and 15,000 employees, including warehouse personnel.
