Following the news that Frasers Group has put Matches into administration two months after its c£50m acquisition in December 2023;
Alice Price, Apparel Analyst at GlobalData, a leading data and analytics company, offers her view:
"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. Although Frasers Group successfully steered luxury retailer Flannels back to profit after acquiring it in 2017, Matches' online specialism would have presented Frasers with unfamiliar challenges that it would have lacked the expertise or capacity to easily resolve, due to most of its portfolio being multichannel. Selling luxury online is particularly tough, given shoppers generally prefer to try on and see expensive products in person before purchasing. Supplier relations had also begun to sour under Frasers' ownership, with the fashion giant reportedly seeking sizeable discounts, while some brands reported overdue payments, resorting to termination of contracts.
"Though 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, this news represents the latest blow for luxury marketplaces. As well as Matches' demise, Mytheresa and Yoox Net-a-Porter continue to report ailing demand, and Farfetch was acquired by Korean e-commerce giant Coupang in December 2023 for a fraction of its former £20bn valuation.
"Luxury marketplaces also remain affected by the wider slowdown in luxury demand, especially in Europe and the US, as aspirational shoppers continue to reign in spend amid ongoing inflationary pressures. 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. This has caused marketplaces to suffer dwindling customer acquisition, with Matches resorting to discounting to entice sales, which in turn impacted its margins as well as consumer perceptions."
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