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Is Matchesfashion Readying for a Sale?

The luxury fashion retailer, which reported revenue of £204 million in 2016, is seeking advisors to manage a sale, BoF has learned.
Matchesfashion.com in Notting Hill | Source: Matchesfashion.com
By
  • Tamara Abraham

LONDON, United Kingdom — Matchesfashion.com is exploring a sale, BoF has learned.

The luxury fashion retailer, which reported revenue of £204 million in 2016, is seeking advisors to manage a sale, according to several sources close to the situation.

The company will likely be acquired by a private equity firm, and is already courting interest, the sources say.

A representative for Matchesfashion.com said that they were unable to comment on speculation.

The news comes five years after Matchesfashion.com raised £20 million ($26 million) in funding from venture capital firms Scottish Equity Partners and Highland Capital Europe. At this point in time, it would be natural for these investors to be looking for an exit.

In a 2015 interview with The Daily Telegraph, Tom Chapman said an IPO might happen in "four or five years," adding that, "You build a business for an IPO, but it's just not a personal journey for me. I'm not a person who would ever want to run a public company." Now, though, it looks like an exit to private equity is on the cards instead.

In March, the company released its financial results for the first time, revealing 61 percent year-on-year growth. Matchesfashion.com reported record growth in all markets — 45 percent in the UK and over 80 percent in the rest of the world — with total online sales for 2016 up by 73 per cent.

Matchesfashion.com generates 95 percent of its revenue online, but also boasts four brick-and-mortar stores in London, as well as a private shopping townhouse in Marylebone. In May 2017, Matchesfashion.com also announced plans to establish a new space in London's Mayfair. The site at 5 Carlos Place will open in the autumn, and play host to events, three floors of private shopping suites, and a two-floor retail store.

The investment in further physical retail space — as well as experiences — could prove to be a canny one. While luxury e-commerce is growing fast, the portion of personal luxury goods purchases that happen online — now about 7 percent of total — is expected to plateau at about 20 percent by 2025. This means that, for the foreseeable future, the majority of sales will still take place in physical stores.

The company has also invested heavily in technology, and both the retail sites and the e-commerce business will soon rely on a new proprietary mobile point-of-sale app that will give a 360-degree view of the customer, logging every interaction, be it an e-commerce purchase or the attendance of an event.

The company’s online success comes 10 years after the luxury London boutique group ventured into e-commerce, which later contributed to a rebranding of the company as Matchesfashion.com in 2013.

The company, which celebrates its 30th birthday this year, was founded by Tom and Ruth Chapman as a small boutique in London's Wimbledon. The couple stepped down as joint chief executives in 2015, becoming joint chairmen, while former COO Ulric Jerome took the helm as CEO.

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