Frasers founder Mike Ashley - Jamie Lorriman

Mike Ashley’s Frasers Group is putting Matchesfashion into administration weeks after buying the luxury online retailer, putting hundreds of jobs at risk.

Staff at Matchesfashion will be told on Friday morning that the company is being placed into administration. Frasers swooped for the online store for £52m in late December.

The Telegraph understands that Teneo is being appointed to run the administration process. A notice of intention to appoint an administrator was filed on Thursday.

The shock move follows earlier optimism over the takeover. Michael Murray, Frasers’ chief executive, said in December that the acquisition would “strengthen Frasers’ luxury offering, further deepening our relationships and accelerating our mission to provide consumers with access to the world’s best brands”.

However, the business is understood to have been performing worse than Frasers’ executive anticipated, despite efforts to put a new strategy in place to stem losses.

Matchesfashion was launched by Tom and Ruth Chapman in 1987 as a boutique store in Wimbledon, south-west London. It was later rebranded as Matchesfashion.com, having shifted its business online.

It was bought by private equity firm Apax Partners in 2017, which reportedly invested up to £600m in the company. However, it has recently been struck by the slowdown in the luxury sector and posted losses of £33.5m last year. According to its latest accounts, it employs just under 680 people across its business.

Frasers Group’s £52m takeover of the business was viewed as a cut-price deal which took advantage of the pressure in the luxury market. Major luxury retailers including LVMH have warned over the slowdown in the market, as high interest rates forced wealthy shoppers to cut back.

Frasers, meanwhile, has been pushing to go more upmarket with its brands. Late last month, it said the chief executive of Italian designer shoe company Sergio Rossi was joining its board.



Mr Murray, meanwhile, said there were opportunities to buy in the luxury space, saying: “If you look at the global luxury market, you can start to see the cracks in the businesses which haven’t got that financial resilience. With the slight dip in the market, opportunities will suddenly start to present themselves.”

Matchesfashion will mark the second high-profile retailer to be put into administration shortly after being taken over in recent weeks. Earlier this year Aurelius placed the UK chain of The Body Shop into administration.

Frasers declined to comment.