Two months after Fraser Group, a British retail, sport, and intellectual property group, acquired Matchesfashion.com for 52 million pounds, reports have surfaced that the iconic luxury e-tailer will be closing down.
Founded in 1987, Matchesfashion has 3 brick and mortar locations around London, but its business is primarily online, boasting a top-tier luxury offering of over 650 brands.
Nearly 300 employees were let go Friday, The Financial Times reported, while the company enters administration. Still, its profitability remains bleak as the slowdown of luxury goods continues.
Fraser Reports Financial Loss
A statement from Frasers released to the London Stock Exchange on Thursday explained the shocking decision to shut down Matchesfashion after such a short amount of time post-acquisition, stating its instability. The release explained that Matchesfashion continually missed planned targets despite attempts to make the business profitable.
While said profitability was the goal for Frasers, who acquired Matchesfashion back in December, it has struggled to find its footing, and it quickly became clear that the business would require too much change and continued excess funding to stabilize it.
Vogue Business reported the administration process does not exactly mean Frasers will shutter the Matches umbrella entirely; the group declined to comment. The news is significant for the online luxury retail industry, which continues to see a decline admist the overall industry slowdown.
That’s unfortunate since they were my favorite online shop.
It seems to me this is not so much due to a “luxury slowdown” as “unsustainable online business slowdown”. NAP, Farfetch, Matches all kept expanding, adding brick & mortar, adding editorial, while never reaching profitability.
I’m so sad. It seems like luxury retail for some is a Bermuda Triangle of Sadness. I just ordered backups of my favorite Raey jeans just to be safe.
Cakeymakeybakey did you get jeans? I place an order on March 8 and I’m waiting to see if they are going to send my items.
They have stopped any inbound and outbound shipments for weeks. I have been thinking of buying a Raey item too, but then decided not to as I don’t want to lose any money
Could see it coming a mile away. Items priced at £2,300 being reduced to £300ish online … There’s no way that’s a sustainable model of business. They had a shop in Notting Hill that closed some years ago and whenever I went there it was near empty. The shop in Carlos place would have added a high rent that was unnecessary to their operations. I’ve been a customer of theirs for years but couldn’t fathom how it made business sense. It’s sad that there wasn’t better direction for the company.
So much for my level four membership.