Frasers Group, the retail group owned by British high street tycoon Mike Ashley, has agreed to buy luxury e-tailer Matchesfashion for just £52 million ($63 million), in a deal that signals heavy losses for its private equity backer Apax Partners.

For Frasers, whose holdings include British high street chains like Sports Direct and department store House of Fraser, the e-tailer (which recently rebranded to simply “Matches”) is a boost to its “elevation strategy.” The group has also invested heavily in its Flannels unit, a chain of luxury multi-brand stores, in a bid to move up market under its chief executive Michael Murray in recent years.

Matches CEO Nick Beighton will stay on at the loss-making e-tailer following the acquisition, “working closely with the Frasers team to develop a strategy to successfully build on the underlying strength of the business whilst rapidly unlocking synergies,” the companies said in a statement.

Frasers is believed to have beaten out competition from British retailer Next, which was among the “small number of parties” that submitted offers to take over the business, according to an earlier report from Sky News.

Matches was once a fast-growing, profitable business. Founded by Tom and Ruth Chapman in the late ‘80s as a brick-and-mortar store in London’s Wimbledon neighborhood, the retailer was highly regarded for its tightly curated buy with a unique point of view and its championing of emerging design talent.

However, since selling to Apax Partners in 2017, the company has struggled to balance the complexities of attracting new clients and scaling its business against profitability, accruing widening losses year-on-year. Multiple leadership changes, a challenging pandemic period, and the broader structural decline of the wholesale model have only added pressure.

Matches has proven an extremely costly investment for Apax, which purchased the company at a reported $1 billion valuation and subsequently made multiple significant investments into the business.

Matches’ gross assets were valued at £170 million for the fiscal year ended Jan. 31, 2023. Sales in the period dipped slightly to £380 million, while losses widened to £39.8 million in adjusted EBITDA terms, compared to £25 million the previous year.

Matches is not the only luxury e-commerce player facing troubles: Farfetch narrowly escaped bankruptcy by selling to South Korean group Coupang this week, while the future of Richemont’s Yoox Net-a-Porter is unclear after a deal to merge the loss-making unit with Farfetch fell apart. A broader slowdown in the luxury sector and high borrowing costs are only compounding the crisis.

Since current CEO Beighton took the reins last year — becoming Matches’ fourth CEO in as many years — the former Asos chief has spearheaded efforts to revive the company, refreshing its leadership team (among his hires was chief commercial officer Carl Tallents, formerly head of luxury at Frasers Group), growing the site’s offering of brands and products, and expanding into rental services. The company also underwent a rebrand and worked to optimise back-end operations.

At Frasers, Murray (who is founder Mike Ashley’s son-in-law) has poured tens of millions into creating experience-led flagship stores for the group’s Flannels unit, tapping luxury demand in regional hubs across the UK. The group also bought luxury tailoring brand Gieves and Hawkes, as well as taking stakes in companies including Hugo Boss and Mulberry.

The acquisition “will strengthen Frasers’ luxury offering, further deepening our relationships and accelerating our mission to provide consumers with access to the world’s best brands,” Murray said in a statement. “Whilst the global luxury environment is softer, we are confident that by leveraging our industry-leading ecosystem we will unlock synergies and drive profitable growth for Matches.”