1️⃣ The acquisition rollercoaster 🎢
Frasers Group snagged Matches for a cool £52M, dreaming of luxury e-commerce glory. Despite the high hopes, just two months in, they're calling it quits. The losses? A staggering climb from £5.9M in 2020 to a jaw-dropping £70.9M in 2023. Talk about a financial rollercoaster!
2️⃣ The e-commerce domino effect 🎲
In a twist of fate, Farfetch's acquisition by Coupang and founder José Neves stepping down marked the beginning of a challenging era for online luxury. Frasers hoped to reverse Matches's fortunes, previously bought by Apax Partners for £1B in 2017, but the numbers just didn't add up.
3️⃣ A pivot gone wrong 🔁
CEO Michael Murray had visions of elevating Frasers's luxury game with Matches, but the reality was a mismatch. With online luxury facing headwinds and operational hiccups, Matches's future looked bleak, leading Frasers to reconsider its investment.
4️⃣ The fallout 💥
Neil Saunders of GlobalData and Alice Price see Frasers's move as a cautionary tale of underestimating the e-commerce landscape. Meanwhile, Frasers's attempt to save Wiggle for under £10M shows a pivot to potentially more fruitful grounds. Luxury e-tail's value wanes, prompting a strategic retreat.
❓ Did Frasers act too hastily in shutting Matches?
