What really happened with Matches and where do we go from here?

This article is part of our new editorial package, The Future of Shopping, in which we predict how the retail landscape will be shaped over the next decade. Click here to read more. Roy and Helen Powley have been manufacturing jersey fabric and clothing for more than 40 years. The couple works together in a small unit in Leicestershire, England, knitting and sewing dresses and separates in small runs under the name Riverside Design & Textiles. Matches’s own brand, Raey, was one of their biggest clients. Following the retailer’s fall into administration last month, the Powleys are owed thousands of pounds. “We’ve had to cash in some of our pension to stay afloat — it was that or shut up shop,” says Roy. The shock of the Matches collapse is still reverberating across the industry. The immediate focus for most of the brands and suppliers involved is on getting paid and/or retrieving their stock — both of which seem like best-case scenarios. Meanwhile, the future of Matches remains up in the air. Whatever happens next, the retailer so many knew and loved is a shell of its former self, leaving a huge void for brands and their customers. At its height, Matches stocked more than 600 labels, from luxury giants like Gucci, The Row, Loewe and Bottega Veneta to mid-sized designers like Simone Rocha, Erdem and Emilia Wickstead, to smaller names such as Nili Lotan, Róhe, Harago and Haikure. Raey — under the stewardship of creative director Rachael Proud — is understood to have been thriving. Behind these brands stretch a network of manufacturers — some of them micro-businesses, like Riverside Design & Textiles, which partly or wholly relied on Matches for survival. The retailer’s collapse is significant, not just because of the number of employees, brands and manufacturers affected, but also because of what it says about the state of fashion retail today. “What’s happened at Matches isn’t something that can be seen in isolation. It feels like a bellwether for what’s happening across the industry,” says Vogue’s chief fashion critic, Sarah Mower, a long-time supporter of emerging British designers. The British Fashion Council (BFC) has been working with insolvency practitioners at FTS Recovery to support the owners of brands stocked by Matches to understand their rights in relation to stock held or orders placed by the company. BFC chief executive Caroline Rush says: “It is clear from conversations that we have had that the failure of Matches has significant repercussions for the wider fashion retail sector, and we’re working at pace with funders and the BFC network to develop a package of support for designer businesses affected.” The immediate fallout When British retail empire Frasers Group bought Matches for £52 million in December 2023, the former's CEO Michael Murray said he was “confident” that the acquisition would “unlock synergies and drive profitable growth for Matches”, which had been struggling with mounting losses. There was some trepidation in the industry: Frasers Group, which is owned by retail tycoon Mike Ashley, has form when it comes to buying up businesses in distress and putting them into administration. In 2015, it did just that with British designer fashion chain USC (before buying it back following a financial restructuring, a fate that could yet befall Matches). It seemed to provide little reassurance that Frasers has invested heavily in turning around Flannels, the luxury multi-brand retailer it acquired in 2017 — perhaps because Frasers has previously stated its intention to make Flannels the biggest luxury multi-brand retailer in the world, begging the question of where a rival would sit within the group. On 7 March 2024 — less than three months after the acquisition — Frasers announced that Matches was being put into administration after it had “become clear that too much change would be required to restructure it, and the continued funding requirements would be far in excess of amounts that the group considers to be viable”. The next morning, 273 of Matches’s 533-strong workforce were made redundant. Some industry observers question when the decision was made to appoint administrators to Matches and whether more could have been done to minimise the fallout for brands and suppliers. Three senior Frasers Group executives resigned from the board of Matches on 5 March, filings on Companies House (where all UK companies are registered) show — two days before administrators were appointed. Vogue Business understands that Matches continued to accept deliveries from brands and suppliers after that date. Frasers Group declined to comment. “A lot of brands I know shipped out two days before the news came out,” says Diana Kakkar, founder of luxury fashion manufacturer Maes London. “Payment terms were getting longer and longer — from 60 to 90 to 120 days. Brands wanted to get stock to the warehouse as soon as possible.” “I’ve heard from several people that orders were being made and called off into the Matches warehouse in the week leading up to the administration,” says Kate Hills, founder of Make It British, an organisation that connects brand founders with factories to encourage the onshoring of production in the UK (in a call-off arrangement, the supplier retains ownership of the stock until a date after delivery). “Matches came to us last year wanting an oversized jersey dress and top for their range,” recalls Roy of Riverside Design & Textiles. “We did it in our existing yarns to save time, and it was successful. So they came back to us for this season and ordered 200 dresses and 200 tops in their chosen colours. We invested a lot into this order: not just time, but buying special yarns plus accessories. They arranged collection on the Wednesday [6 March] and the 14 boxes were delivered by Thursday. On Friday, we found out that Matches was in administration. We couldn’t believe it. We went to the administrator, who told us we’d have to wait in line with the other creditors.” Stock in a stronghold The administration process in the UK (which is akin to Chapter 11 bankruptcy in the US) can be murky. Insolvency practitioners are tasked with maximising returns for secured creditors as a top priority — typically this means repaying loans from banks or other lenders. As a result, it is often the larger stakeholders that are offered the most protection, while the smaller suppliers are the most exposed. In real terms, what this means is that Roy and Helen’s jersey tops and dresses are still being sold via the Matches website, but that doesn’t mean the couple will be paid the full amount they are owed. Instead, proceeds from all sales made through Matches now will go into a pot, to be divvied up between the creditors in order of priority. “We’ve spoken to about 10 of the BFC’s members who have immediate pressing, unpaid debt ranging from £50,000 all the way up to about £250,000,” says Marco Piacquadio, director of FTS Recovery. “A debt of that size is going to significantly impact some businesses.” One brand owner tells Vogue Business he is owed £70,000 and has 200 items stuck in the Matches warehouse. Brands have spent the past few weeks trying to ascertain if they can recover their stock, or strike a deal with the appointed administrator, Teneo Financial Advisory, for at least a part payment to assist with cash flow. (Teneo declined to comment for this article.) Some business owners are learning that the safeguards they thought were in place — namely, retention of title (ROT) clauses in their contracts that allow suppliers to retain legal ownership of goods until they are paid for in full or other conditions are met — are not worth the paper they’re written on. “A lot of people, at the inception of their business, download a document pack online and think they’re protected because they have ROT clauses stipulated within them — but they’re not necessarily enforceable,” warns FTS’s Piacquadio. “Administrators will push back with a very robust argument: ‘We’ve got a duty to the general body of creditors, and their collective interests outweigh that of one supplier.’” “I spoke to two different solicitors, and I was told by both of them that it was very unlikely that I actually see any of the money I’m owed because what happens in these situations is that they pay the banks first and tax and the VAT people, and then they get to what’s called unsecured creditors, which is people like me, and by the time they get to us, usually the money’s run out,” says London-based designer Ashish Gupta, founder of the Ashish brand. “Matches was a big client,” Gupta continues. “I was doing four collections for them: the two main lines and two collabs. So it was a really large chunk of my business, and I think that’s the case for a lot of the brands on [the Matches website].” Menswear label Harago has been stocked by Matches since the SS21 season. “This was such a shock,” says founder Harsh Agarwal. “It’s been a very, very big loss for us as an independent brand. We have pending payments to come from them, and we had a huge new order in production that we had to stop, which included about 25 styles that we were doing exclusively for Matches. So it’s been very rough since this news broke. Hopefully, we’ll be able to at least recover our due payments.” For manufacturers, there’s a double whammy. “There’s the immediate impact because you’re not going to get paid, but you’re also not going to get new orders from the brands,” says Mustafa Fuat, founder of luxury manufacturer Gosha London. It’s not as simple as finding more clients elsewhere, he adds. “They’re not going to suddenly take production away from a supplier they’ve been working with for years and just give it to somebody else. It’s going to take a while before you can get any extra work.” It’s been a challenging few years for British fashion, but the past 12 months especially so. British fashion chain Ted Baker collapsed last month. The administration of British designer Christopher Kane’s eponymous brand in 2023 (which he, along with his sister and co-founder Tammy, later bought back) also hit suppliers hard. Hills reiterates that the majority of UK manufacturers are small — 90 per cent employ less than 10 people, she says. So, while Raey and Christopher Kane may not be the biggest brands, their orders would have been substantial for a smaller producer. “If that’s gone overnight, then the manufacturers are left with no work. [Matches’s collapse] has left them with empty production lines very suddenly,” says Hills. What will fill the void? All of this points to the desperate need to fill the hole left by Matches. Its collapse — hot on the heels of Farfetch’s fire sale to South Korean firm Coupang — marks a tipping point for the industry: the end of a boom era in luxury e-commerce. It will undoubtedly lead to some big shifts. Some predict that brands will accelerate their move towards a direct-to-consumer (DTC) model as they seek to reduce their reliance on wholesale stockists. “For the last five years, our brand has been very focused on the wholesale business, that’s where most of our energy was going. Now, we are working on launching our own website,” says Harago’s Agarwal. “At the same time, we are expanding to work with more stockists [to spread the risk].” Riverside Design & Textiles is considering a similar path; whether that’s cutting out the middleman and becoming a wholesale brand in its own right or going DTC. “We can’t trust anybody anymore, so direct sales may be the way to go,” says Roy. “Brands will recognise their vulnerability and how the wholesale model was killing their margins,” predicts Maes London’s Kakkar. “If the brands are young or agile enough to pivot towards DTC, their turnover might come down, but their profit margins will go up. The big question is whether the brand will still be big enough turnover-wise to remain viable.” But she points out that DTC is a long game. “It won’t happen overnight. For the big houses and brands that have been established for decades, DTC might be easier. But young emerging cool brands will struggle to rely on DTC as the only point of sale. They need the curation of wholesale.” Others agree. “Doing retail is expensive. You’ve got to have expertise online, and you’ve got to know what you’re doing in different markets — unlike when you go in with a wholesaler,” says Ryan Llewellyn-Pace, founder of consultancy Pace Partnership London and unisex fashion brand Hay Life. “If you’re part of a big group and you’ve got money to invest, fine, but for smaller brands, it might not make sense.” And let’s not forget the consumer in all of this. Many luxury shoppers prefer a multi-brand environment that enables the mixing and matching of different aesthetics and the discovery of new names, argues Elizabeth Von der Goltz, whose CV includes stints as global buying director of Net-a-Porter, chief commercial officer of Matches, CEO of Browns and chief fashion and merchandising officer of Farfetch. “We’ve got to a place where brands don’t trust retailers, so they’re trying to do it all on their own. But that’s not how a customer wants to shop.” She advises brands to consider a balance between DTC and finding strategic wholesale partners. Multi-brand isn’t dead There is, of course, the possibility that other existing multi-brand retailers will take advantage of Matches’s collapse to gain market share. “There’s an opportunity in the market right now because, even if Matches is saved, it would take a long time to fix,” says Von der Goltz. However, some of the retailers that would have been obvious contenders to the throne in the past are facing uncertain futures of their own. For example, Browns — the iconic London store that once (like Matches) had a formidable reputation for discovering new talent — is owned by Farfetch. Brand director Tyler Psarras and buying director Ida Petersson were among those to leave Browns in December 2023, ahead of Farfetch’s sale to Coupang. Meanwhile, Richemont is still trying to find a buyer for loss-making Yoox Net-a-Porter (YNAP) after its deal to sell a 47.5 per cent stake in the group to Farfetch fell through. Of the players in Europe, Germany’s Mytheresa seems best placed to capitalise on the opportunity: it is one of the few multi-brand players that has maintained steady topline sales growth while remaining profitable. Mytheresa is reported to be among the potential suitors for YNAP, sources told the Financial Times earlier this month — a deal that could strengthen its foothold in luxury retail, though at a cost. Mytheresa’s policy is not to comment on potential M&A activities. CEO Michael Kliger notes, however, that Mytheresa is benefitting from the current market turmoil in multiple ways, not least because some consumers are searching for new shopping destinations. “Space is opening up, and we will try to take as much of that space as possible,” he says. Kliger’s faith in the future of multi-brand retail has not wavered. “2023 was a tough year, and we have seen a pivotal moment where businesses that were already struggling fell apart. But there is a consumer out there that loves multi-brand. We aspire to be much more than an e-commerce site. We try to create a luxury community so that people really have a sense of belonging. I think that’s very important nowadays. We try to create desirable experiences, whether it’s with Dolce & Gabbana in Portofino or Miu Miu in Vienna. Customers who shop for luxury are trying to satisfy emotional needs with these purchases. It’s not just about the transaction.” However, Mytheresa’s tight curation — it carries around 200 brands — means it’s not an easy nut to crack for emerging talent. “In general, because we are so highly curated, it’s tougher to be part of our portfolio than others,” Kliger acknowledges. “The mantra is that if a new brand comes in, one needs to go out. That doesn’t mean we don’t take new brands, but there needs to be a reason to have them in the portfolio.” For emerging brands, a number of multi-brand concept stores in the luxury space offer support, such as Machine-A or Dover Street Market — not to mention Selfridges and a network of smaller, independent boutiques dotted across the UK. Machine-A, which is majority-owned by fashion business accelerator Tomorrow, has been gradually expanding; including opening in Shanghai in 2022 and upsizing its London store last year. The extra space allows Machine-A to host brand installations, such as showcasing emerging designers. Founder and buying director Stavros Karelis laments the loss of Matches, pointing out that it has a knock-on impact on other retailers and the industry as a whole. He’s determined to learn from the mistakes made by others. “My number one priority is to not make the mistake of thinking Machine-A should one day become this global platform that tries to satisfy everyone and sell hundreds of brands. I believe this model is not viable. We need to focus on what we do best — offering something highly curated, interesting and unique that speaks to the customer on an emotional level instead of trying to satisfy everyone or become the next big thing. It’s about creating a special relationship with your loyal audience and evolving and increasing that audience in a healthy way.” British retailer LN-CC, which stocks the likes of Gucci, Prada and Rick Owens, gave the industry a welcome boost when reopening its iconic London store on 23 March, three years after it closed. “Multi-brand isn’t dead. Customers look for and enjoy a space where they can truly discover products, new styles, and they can discover how they combine them,” CEO Cristian Musardo told Vogue Business ahead of the opening. “At the same time, brands need [retailers] that reach a new type of customer.” Italian luxury retailer Modes is expanding and plans to open its first-ever UK store later this year after appointing Simon Whitehouse as CEO (Whitehouse, who hails from the north of England, was formerly CEO of JW Anderson). Modes operates more than 20 stores across Europe, including multi-brand women’s, men’s and childrenswear boutiques, plus some mono-brand franchises. It stocks a tight edit of 40 brands, including Marni, Dries Van Noten, The Attico, Coperni, Lemaire, and emerging names such as The Big White Blue, Ebit, Raxxy and Connor Ives. “People are looking for a personalised, multi-brand experience where you can find different collaborations or exclusive products,” says Whitehouse. He adds that Modes offers a point of difference because of its network of stores across the main European fashion capitals, plus resort locations. “That gives us an advantage in conversations with brands.” Llewellyn-Pace, meanwhile, is launching a multi-brand retailer dedicated to outerwear called Out With Style, which will stock brands such as Moose Knuckles, Woolrich, Hunter and Barbour. Starting out as a website, the plan is to open bricks-and-mortar stores in the UK. “We’ve done a lot of research on what the consumer is looking for, and essentially, it is more specialisms, rather than the mass multi-brand websites we see so much of today,” he explains, echoing Karelis. “We felt very strongly that there was a need to have fewer brands and be more purpose-specific. Consumers need to understand why it’s there. You can’t be everything to all people.” New entrants would do well to remember what made Matches special in the first place, says Vogue’s Mower. “[Founders] Tom and Ruth Chapman and Natalie Kingham [who latterly held the title of global fashion officer] were a formidable triumvirate: they understood that you needed to have amazing fashion in the window, but it also went deeper than that. Natalie was instrumental in helping designers whose potential she saw — giving them advice about how to grow their businesses. The whole team was so enthusiastic. It was part of the community and infrastructure of London.” She’s confident that designers will find ways to survive and thrive. “In times of crisis, creative people come up with new things. In times of doom and gloom, you need fireworks. However small those fireworks are, they can ignite something.” Comments, questions or feedback? Email us at feedback@voguebusiness.com. More from The Future of Shopping: Welcome to the future of shopping The dawn and demise of retail disruptors: How the last 20 years changed shopping Can good customer service make shopping fun again?

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