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Ashley's Frasers Group pulls plug on Matchesfashion

Mike Ashley's Frasers Group is putting Matchesfashion, the luxury online clothing platform, into administration less than three months after buying it.

Sky News has learnt that the company has filed a notice of intention to appoint administrators after a number of brands terminated their relationships with the site, and amid heavy losses.

Sources said a stock exchange announcement was expected to be made by Frasers on Thursday evening or Friday morning.

It was unclear whether Frasers would seek to retain control through a pre-pack insolvency deal, although insiders suggested that was the likeliest outcome.

It comes barely ten weeks since Mr Ashley's high street empire agreed to pay more than £50m for Matchesfashion - a deal which itself crystallised heavy losses for its former private equity backer.

Matchesfashion, which sells fashion brands including Balenciaga, Gucci and Valentino, began life as a single shop in Wimbledon, southwest London, more than 30 years ago and in recent years has boasted over 100 million annual visits to its website and app.

Retail industry sources said Frasers had tried to secure sizeable discounts from suppliers in recent weeks, with some brands said to have been disgruntled by the approach adopted by Matchesfashion's new owner.

One source said that some brands had not been paid for months.

Matchesfashion had struggled under a succession of leadership teams prior to the arrival of Nick Beighton, the former ASOS chief, in 2022.

Under Mr Beighton, the platform's performance improved markedly with a renewed focus on operational efficiency and the sharpness of its marketing.

It was unclear on Thursday whether Mr Beighton would continue in his role during the administration process.

Matchesfashion had been caught out by the sharp slowdown in global luxury goods sales which is affecting retailers across the sector.

Farfetch, which was listed in New York but was founded in the UK, agreed on a sale to South Korea's Coupang late last year, a deal which entailed a major financial restructuring.

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Apax Partners is said to have invested as much as £600m of its investors' money in Matchesfashion since buying the site from its founders six years ago.

The takeover of Matchesfashion was supposed to deliver a significant boost to Frasers' "elevation" strategy, now spearheaded by the company's chief executive - and Mr Ashley's son-in-law - Michael Murray.

Mr Murray said at Frasers' most recent results presentation that the strategy, which is partly being implemented through its Flannels brand, had been paying off.

For Apax, the ownership of Matchesfashion has been a disaster.

Its most recent equity injection, worth £20m, was delivered last June, as part of a previously pledged £60m investment.

Matchesfashion features more than 500 established and 'new generation' designers, delivering to over 170 countries.

In November 2021, its accounts flagged "material uncertainty" over its future without an improvement in its trading performance.

Frasers, which has swooped on a large number of ailing retailers in recent years, declined to comment.