Mike Ashley's Frasers buys Matchesfashion for £52m

Mike Ashley has a long history of buying retail stocks that he believes are undervalued. Photo: Kirsty O'Connor/PA

Mike Ashley's Frasers group has bought luxury online retailer Matchesfashion at a £52m cut-price.

The high street tycoon has agreed to buy the business from their private shareholders Apax Partners, who are selling Matchesfashion amid the crisis. slowdown in the luxury sector.

Apax bought the company in 2017 and is said to have invested up to £600 million, although problems led to Matches posting a loss of £33.5 million last year.

Matches was founded in 1987 by couple Tom and Ruth Chapman, who started the business as a boutique in London's Wimbledon Village.

Later, in 2007, the couple opened an online store and six years later renamed it Matchesfashion.com.

Tom Chapman told The Telegraph in 2015 that the company's online success «was a bit of a shock» as it signed up 2,000 customers in the first day alone.

Today it sells products in about 150 countries and makes most of its money abroad.

However, the company has struggled to turn a profit in recent years, with revenues also falling due to between £387m and £380m last year.

Former Asos chief executive Nick Beighton took over as head of Matches last year, becoming the company's fourth chief executive in as many years.

Last month he said the business was undergoing a “massive cultural reset.”

The sale of Frasers comes as luxury retailers and brands face a slump in sales. interest rates and inflation pressures have forced wealthy shoppers to cut spending.

In the US, purchases of luxury goods and fashion fell 9.6 pence in November, according to the latest data from Citi, while concerns were raised about a slowdown Chinese economy.

The slowdown is not limited to consumer goods and fashion, as automakers are also affected.

Lutz Meschke, Porsche's chief financial officer, said earlier this year that drivers were becoming increasingly «reluctant» to buy expensive sports cars due to higher interest rates.

Ashley attacks Matches. just days after fellow luxury e-tailer Farfetch was rescued in a £396 million bundle sale to Korean consumer goods giant Coupang.

This resulted in the destruction of all shareholders, including Farfetch founder and CEO José Neves.

Michael Murray, chief executive officer of Frasers, said: “This acquisition will strengthen Frasers' luxury offering, further deepening our relationship. and accelerate our mission to provide consumers with access to the world's best brands.»

Michael Murray, CEO of Frasers, said the business had been very profitable since the company was founded. Photo: Paul Grover for the Telegraph

This is the latest in a series of acquisitions by Frasers, which has been steadily expanding its empire. with acquisitions and stakes in rival retailers.

Mr Ashley, who has stepped away from day-to-day management of the business but remains the majority shareholder of Frasers, has a long history of buying shares in retail chains that he considers undervalued.

Mr Murray, Mr Ashley's son-in-law, said earlier this year Frasers was «very profitable since our inception.»

In an interview with The Telegraph, he also insisted that he, not his father-in-law, makes decisions at Frasers. -law.

He said: “Mike is not on the board of directors. I sit on the board of directors along with the non-executive directors and we make decisions. You must be on the board to make the final decision.”

The deal with Matches comes just weeks after Frasers pulled out of an agreement to buy German retailer SportScheck.

It comes after the chain went into administration following a financial crisis from owner Signa.

Frasers has set its sights on acquiring SportScheck as part of plans to become the biggest player in sports. retail trade in Europe, the Middle East and Africa.

However, last month the company said it would make a new attempt to acquire the business.