Mike Ashely’s Frasers Group is putting Matches Fashion, the luxury online fashion retailer, into administration less than three months after buying it in a cut-price deal worth £52m.
In a statement, the retail behemoth said the business has “consistently missed its business plan targets” despite support from the group.
Frasers added that while Matches management team has tried to find a way to “stabilise the business”, it discovered “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 light of this, Frasers has been informed that the directors of Matches have taken the decision to put the Matchesgroup into administration,” they said.
The e-commerce chain which sells Ralph Lauren and Balenciaga, has been loss-making in recent years. Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the year ended 31 January 2023 was negative to the tune of £33.5m.
Frasers’ takeover offered a lifeline for the designer online retailer, which has struggled in recent years due to the actions of former leaders.
Former Asos chief executive, Nick Beighton who took the reins last year has been ploughing ahead with a turnaround plan for the firm.
At the start of the year, it secured a £60m investment by its private equity backer Apax Partners.
Frasers, which is known for buying troubled retail brands, said it remains “committed to the luxury market and its brand partners”.