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When the news broke late on Thursday that luxury retailer Matches would be entering administration, social media lit up — as did its employees’ group chats.
“We didn’t know anything until the news broke via Instagram, there was no communication internally at all,” says an anonymous source who works at senior level at Matches.
The following morning, the 533 staff employed by Matches across its head office and stores were told to join one of two calls with newly appointed administrator Teneo Financial Advisory: 273 of those were told they were being made redundant immediately. The rest await further instruction.
Those employees are not the only ones left in the dark about what happens next. According to a statement from Teneo, the retailer “will continue to trade through both the website and the stores, while a potential buyer is sought for the brand”. Some of the brands Matches stocks say they are waiting to find out what this means for unpaid invoices and any unsold inventory. (Frasers Group and Teneo declined to comment further for this article.)
“We had already delivered a capsule collection and were meant to be paid for it in the first week of January, as their payment terms are 60 days,” says Ashish Gupta, whose brand Ashish is stocked by the retailer. “We were told that because of the change in management, they were restructuring the company and payments would be delayed. So we just kept waiting. Then eventually the emails just stopped.” Gupta says the last correspondence from Matches was on 24 January.
London jewellery brand Otiumberg was first approached by Matches just after the 2020 lockdown, and created an exclusive capsule for the site in 2022. “The relationship was always very positive, and we never struggled to sell stock,” says Rosanna Wollenberg, co-founder and head of brand for Otiumberg. “The agreement was always one of bought stock (important to us as an independent brand), and we were consistently paid on time.”
Wollenberg says she continued to work with Matches after it was sold to Frasers Group because she believed it would be turned around. “We were asked for a small discount on our last payment, which once agreed and negotiated down was paid immediately. Following that, we received an order for AW24, which we will now have to cancel. We had anticipated issues but were under the impression that the business would survive.”
For smaller brands, lost business as a result of the administration could have a significant impact. “I don’t actually know what’s going to happen right now, but there’s this sense that all invoices that haven’t been paid won’t be, and that’s just money lost, and the best case scenario is just getting stock back,” says the founder of one independent brand stocked by Matches, who wishes to remain anonymous.
However, they add that there’s no guarantee the stock will sell elsewhere. “I was commissioned to make these pieces especially for [Matches] — it’s not the stuff people usually buy off of me. They were my first ever stockist and I’ve gotten myself in a position where their money means a lot to the business as I’m only doing wholesale right now. It’s so sad that the people who will lose out the most are the people who can’t afford it at all.”
Where did it all go wrong?
Mike Ashley’s Frasers Group acquired Matches in December, stating its intention to elevate the retailer’s position within the luxury market. It pulled the plug less than three months later.
In its statement announcing the administration, Frasers Group said Matches had “consistently missed its business plan targets” and “continued to make material losses” even with support from the group. “While Matches’s management team has tried to try to find a way to stabilise the business, it has become clear that too much change would be required to restructure it, and the continued funding requirements would be far in excess of amounts that the group considers to be viable.”
In January, Matches said that its losses had more than doubled year-on-year to £70.9 million in 2023, from £39.8 million in 2022. In a statement, Teneo’s Benji Dymant, one of the joint administrators, attributed Matches’s “sharp decline in demand over the last year” to shrinking discretionary spend, high inflation and high interest rates.
It’s been a steep fall from grace. Matches was founded in 1987 by Tom and Ruth Chapman as a bricks-and-mortar store in Wimbledon Village, London. It gained a cult reputation for its curation of brands, and over time grew into an e-commerce behemoth carrying over 600 luxury labels and reaching over 170 countries through Matchesfashion.com.
When the Chapmans decided to sell Matches, it triggered a fierce bidding war. Ultimately, private equity firm Apax Partners won out, acquiring Matches in 2017. The terms were undisclosed, but the deal was said to value the retailer at $1 billion. Matches reported solid sales of £430.5 million in 2019, but the pace of growth was slowing and costs were starting to mount. The retailer was operating at a loss before the Covid pandemic hit. Increasing competition from e-commerce rivals like Ssense, Farfetch and Mytheresa piled on the pressure.
Farfetch’s fire sale to Korea’s Coupang in December, and the later departure of founder José Neves, signalled that the luxury multi-brand boom era had come to a firm close. “Matches’s online business was founded in a different era of luxury e-commerce. Today, this previously successful online luxury fashion model has a number of significant issues that resulted in stagnating growth, weak fundamentals, and the inability to adapt to the change in product and service expectations of the luxury customer,” says Nina Briance, founder and CEO of Cult Mia, an independent fashion platform.
“The crowded online multi-brand luxury landscape has been drowned by pricing wars over the same Gucci bag sold on Farfetch, Net-a-Porter, Matches and Gucci itself (to name a few),” continues Briance, who adds that there has been such a shift in the way that content now discovers consumers on socials, and not the other way around, as is the case with the TikTok FYP. “It’s removed the reliance on large multi-platform e-tailers to stay up to date and for product discovery. With feeds now inundated with product recommendations from every angle, the challenge and focus is to cut through that noise and differentiate — not just your offering, but the way that you curate it too.”
As Matches’s losses continued to widen, Apax attempted to revive its fortunes, including cycling through several chief executives. In 2022, the firm drafted in Nick Beighton — the man who turned Asos into a £3.9 billion business — to lead Matches as CEO. In January 2023, Apax injected £60 million into Matches to keep it afloat. By the end of the year, it offloaded the business to Frasers Group for £52 million.
Previously known as Sports Direct International, Frasers Group has spent the past few years snapping up fashion and sportswear retailers and brands, ranging from the value end of the high street up to luxury — often acquiring them from administration, or the brink of. Its portfolio includes House of Fraser (bought for £90 million in 2018 as it went into administration), USC, Jack Wills (purchased out of administration for £12.7 million in 2019) and Sports Direct. It acquired multi-brand luxury retailer Flannels in 2017 and steered it back to profitability, growing its annual revenues to £5.5 billion in 2023.
Announcing the acquisition of Matches, Frasers Group CEO Michael Murray said in a statement that the deal would “strengthen Frasers’s luxury offering” and that the company hoped “to unlock synergies and drive profitable growth for Matches”.
But analysts point out that Frasers Group’s portfolio is heavily weighted towards bricks-and-mortar retail, and selling luxury online is a whole different ball game. “Shoppers generally prefer to try on and see expensive products in person before purchasing,” says Alice Price, apparel analyst at Globaldata. “Designer brands have also begun reducing their reliance on wholesale partners, instead investing in their direct-to-consumer (DTC) businesses to garner greater control over their brand images and uphold their exclusive allure.”
Price also refers to the souring supplier relations that had been prompted by Frasers’s takeover, “with the fashion giant reportedly seeking sizable discounts, while some brands reported overdue payments, resorting to termination of contracts”. According to Sky News, this had led to a number of brands terminating their relationships with the site, which pushed the company to file a notice of intention to appoint administrators.
What happens next?
Teneo says it will continue to assess the “appropriate structure” for Matches as sale discussions progress. It did not comment on whether any parties have so far expressed an interest in acquiring the business.
“It is not yet certain if Frasers Group will dissolve Matches completely or is using the administration to restructure the business and reduce its operational costs,” says Globaldata’s Price, who notes Frasers Group’s decision to shutter Matches so shortly after it acquired the business suggests it “underestimated the scale of investment and time required to oversee a turnaround”. Now only time will tell whether another firm has that oversight.
Meanwhile, Matches’s remaining 260 employees wait to find out their fate as their colleagues digest the redundancies. “I’m not entirely shocked, I just think it’s brutal. It just feels like the most old school patriarchy way of doing business,” says an anonymous Matches employee who was made redundant last Friday.
On the brand side, the British Fashion Council (BFC) has emailed more than 100 British labels that are stocked on the Matches website, to offer practical advice compiled by licensed insolvency practitioners FTS Recovery, as well as to request information on the “amounts owed from goods already shipped”, the “wholesale value of goods that you have in production to ship this season” and the “value of orders taken this sales season that will not be confirmed”, to see what broader steps could be taken.
“The news that Matches has appointed administrators is devastating for many businesses. Since it was launched, Matches has been a champion of emerging talent and British brands, which means in some cases it is the largest wholesale partner for many BFC member brands,” says Caroline Rush, chief executive of the BFC, in a statement emailed to Vogue Business. As well as offering guidance on what course of action might be available to designers, Rush vows “to stay close to this, looking at ways in which the British Fashion Council and its valuable network can support those during this challenging time”. “Our thoughts are also with Matches employees,” she adds.
Ashish’s Gupta believes more needs to be done structurally to protect independent brands from the luxury industry’s changing tides.
“The industry is very much structured to favour large brands. Those brands have the leverage, they are the ones that get paid first,” says Gupta. “But if you’re a small independent brand like I am, you have to shoulder the entire risk. It’s really unfair because no one’s suppliers, factories or production are going to wait 90 days to get paid. If there isn’t any framework provided for acceptable terms around retail then a lot of small independent brands will disappear because they won’t survive.”
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