Matchesfashion will flourish under new majority shareholder Apax Partners as long as it keeps its founders’ mentality at heart, brands and analysts said this week.
Tom and Ruth Chapman, the husband and wife team who founded Matches in 1987, have agreed to sell the luxury fashion retailer to Apax for an undisclosed amount, rumoured to be £800m. This is higher than initial estimates of its value, which came in at £600m.
The Chapmans – who owned about 70% of the business – will retain a minority stake, as will existing venture capital backers Scottish Equity Partners (SEP) and Highland Europe.
The founders will take on advisory roles, while chief executive Ulric Jerome and chief financial officer Fiona Greiner will remain in place. The deal is expected to complete over the next three months.
“The value that’s been mooted is a compliment to [the Matches team] and their hard work,” said Wayne Sorenson, founder of British menswear brand Sorenson, which is stocked by Matches.
“Tom and Ruth have built and incredible team. It’s a growing business and that’s a direct result of them being leaders and not followers. What I love about Matches is that it still has a small business approach at heart. If they can maintain that I think it will be wonderful.”
Another representative of a designer stocked by Matches agreed: “If it carries on as it is, I can’t see there being any problem. Tom and Ruth will have an idea of where they want it to go. It’s been going so well with their direction, it would be silly not to carry it on.”
Matches has four bricks-and-mortar stores and a private shopping “townhouse” concept in London. It plans to open a second townhouse in Mayfair later this year. The vast majority of its sales – around 95% – are made online.
In its most recent published results, Matches reported a record 61% jump in turnover to £204m for the year to 31 January 2016. EBITDA was up 458% on 2015, to £19m.
John Stevenson, analyst at Peel Hunt, said the rumour of a higher valuation suggested forecasts for this year were equally positive. “It’s clearly a strong brand with international ambitions, and it has been valued based on its growth prospects.”
Honor Strachan, retail analyst at Global Data, was equally positive: “By keeping the founders and CEO, Matches will continue to have the strategy and vision that have made it successful, and with Apax on board it will be able to grow and compete with larger retailers such as YNAP [Yoox Net-a-Porter Group].
“For the brands [stocked on Matches], it could push them to a much bigger audience.”
Apax is based in London and operates globally. Its investments span various fields including telecommunications, IT, retail and consumer products, media, healthcare and financial and business services. In fashion, it has previously invested in Tommy Hilfiger and used to own New Look.
Jerome said: “Apax’s experience in both the consumer and technology spaces will be a great fit with our business.”
Tom Chapman added: “After 30 years of growing this business Ruth and I are ready to take on new challenges while remaining shareholders and taking on an advisory role.”