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Matchesfashion founders try on £600m suitors

11 August 2017 Business News


Matchesfashion.com, the British online luxury retailer, is in talks with a clutch of investment funds about a takeover that would catapult its founders into the ranks of Britain’s super-rich.

Sky News has learnt that Apax Partners, KKR and Permira are among the buyout firms which are expected to table bids for Matchesfashion in the next few weeks which could value the company at more than £600m.

A payday on that scale would hand a windfall worth well over £300m to Tom and Ruth Chapman, the husband-and-wife team who founded the luxury fashion business in 1987 and continue to hold a majority stake.

Matchesfashion, which sells brands such as Alexander McQueen, Balenciaga and Chloe, has seen stellar sales growth, and this year published details of its financial performance for the first time.

Sources said that the Chapmans could opt to retain a significant shareholding or make available only a minority stake in the company.

However, people close to the sale process, which is being run by Catalyst Corporate Finance, said the private equity groups were expected to pursue a controlling interest in Matchesfashion.

Bain Capital, another investment firm, is also said to be examining whether to table a formal bid for the business.

Set up 30 years ago as a boutique in Wimbledon, south-west London, Matchesfashion went online in 2007 and now sells more than 400 brands online and through three London stores.

Retail analysts say the business is comparable to Net-a-porter and Farfetch, another online-focused fashion site which is exploring plans for an initial public offering in New York that could see it valued at up to $5bn.

The rise of these multi-brand digital boutiques underlines the changing nature of luxury fashion retailing as premium labels strive to reach a wider audience and offer the convenience and ease of purchase more typically associated with cheaper competitors.

In full-year figures published in March, Mr Chapman, the executive co-chairman, said:

“In recent years we have focused on building the foundations – of people, operations, and technology – to enable future growth, with a focus on driving an agile business at scale.

“The results to January 2017 demonstrate that we are now starting to deliver the return on the investment made.”

Sales during the period soared 61% to £204m, with earnings before interest, tax, depreciation and amortisation rising about sixfold to more than £19m.

A transaction involving Matchesfashion would value the business based on this year’s figures, which are likely to demonstrate further solid growth.

The Chapmans are not the only shareholders in the company they founded.

Two years ago, they appointed Ulric Jerome as Matchesfashion’s chief executive, triggering an acceleration of technology investment and the launch of a 90-minute delivery service in London.

In 2012, they sold a minority stake to Scottish Equity Partners and Highland Capital for £32m, with both firms set for a handsome return from their investments.

Matchesfashion, Apax and Permira declined to comment, while neither Bain nor KKR could be reached.


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