Race to buy Matchesfashion heats up as price soars to £800m

The buzz around the potential sale of matchesfashion.com is at fever pitch with the suggested £600 million sale price now rumoured to be £800 million as private equity groups line up to bid for the luxury e-tailer, even before its founders and majority owners make up their minds about whether they actually plan to sell.

Founders and owners, Ruth and Tom Chapman, are understandably tight-lipped about the issue for now, yet according to Sky News, a sale is imminent.

The sale would come as the company stands on the cusp of further explosive growth with its recent decision to open a major East London studio underlining its growth ambitions. The studio will enable it to shoot over 2,000 products a week compared to the current 1,000.

The company also recently opened a French language website with both the studio and the new site reflecting consumer demand for more, and more detailed, product images and local language sites.

So while we have no confirmation from the company itself about what’s happening on the sale front, exactly what do we know, or what do we think we know? After the suggestions of a £600 million sale price, reports said that by mid-August, the British high-end fashion e-tailer, which launched in 2012 and has seen sales growing fast, was valued at £650 million (€702 million). But today’s best estimates are that it could fetch £800 million (€865 million) with the price surging due to the fact that some of the biggest names in private equity have it in their sights.

Four of them are in the running. They include Apax Partners, which is most notably the owner of the Karl Lagerfeld label; Permira, which controls among others Dr. Martens and German fashion group Schustermann & Borenstein, and US mega-investment funds KKR and Bain Capital.

According to Sky News, three of them are about to file their final bids (we don’t know which three) but the Chapmans are said to have not yet made up their minds between selling control and selling a minority stake or even not selling at all.

Not that the two founders are the only shareholders with a say in the firm’s future. In 2012, they sold a minority stake to venture capital companies Scottish Equity Partners and Highland Capital Europe and that firm could be looking to cash in on its investment.

Matchesfashion.com was founded in 1987 and now rivals e-tail heavyweights like Net-A-Porter and Farfetch. Revenues skyrocketed from below £50 million in 2012 to £204 million (€245 million) in 2016, and it posted 61% year-on-year growth compared to 2015. Its 2016 EBITDA rose sixfold to £19 million (€23 million) a year earlier.

Matchesfashion.com has grown fast in the last few years thanks to its strong brand selection and as its work on technology. Its logistics and service expertise and the increasing popularity with consumers of multi-brand fashion websites have been crucial too. Meanwhile the talents of CEO Ulric Jerome, who took the top job two years ago, have certainly made an impact. Jerome’s voice is also likely to be heard when the decision about Matchesfashion’s future is made.

Additional material by Sandra Halliday

Race to buy Matchesfashion heats up as price soars to £800m

See also