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Matchesfashion to dwindle into administration

7th March, 2024
Robert Moore

Written ByRobert Moore

Marketing Manager


+447584583884

Rob has over a decade of experience in web and general marketing. He has extensive knowledge of the Insolvency sector and has helped many worried directors with their questions.

Rob is now working with the Board at KSA Group Ltd to develop strategic marketing programmes to support the business plan and drive more company rescues.

Robert Moore

Matchesfashion, the luxury online clothes retailer is to be put into administration by Mike Ashley’s Frasers Group.

Sky News reports that a number of brands terminated their relationship with the site and the company faced heavy losses, thus the filing of a notice of intention to appoint administrators.

Other sources have reported that some of the brands have not been paid for months and that some suppliers were asked for discounts.

Along with this, there has been a sharp slowdown noticed across the global luxury goods sector, as the UKs current economic state has left many consumers with less disposable income to put towards such goods.

Frasers Group took on the clothing platform not even 3 months ago. It is not clear if control would remain with Frasers in the event of a pre-pack insolvency.

Nick Beighton has led the company since 2022. With his leadership the platform saw a steep increase in performance, said to be due to his renewed focus on operational efficiency and effective marketing. It is also unclear if Mr Beighton would continue in his role post-administration.

Matchesfashion features more than 500 established and ‘new generation’ designers, delivering to over 170 countries.

Matchesfashion is 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.  Why does this happen?  Could it be hubris or do these buyers see more value in the brand name rather than the actual business in the long term.  The brand name is usually retained and sold back to the original owners if the business as a whole is not sold to a third party.

Will the clothing platform be brought back to life?

Man with balloon

What Does Going Into Administration Mean?

Going into administration is when a company becomes insolvent and is put under the control of Licensed Insolvency Practitioners.  The directors and the secured lenders can appoint administrators through a court process in order to protect the company and their position as much as possible. Going Into Administration - A Simple Guide Administration is a very powerful process for gaining control when a company has serious cashflow problems, is insolvent and facing serious threats from creditors. The Court may appoint a licensed insolvency practitioner as administrator. This places a moratorium around the company and stops all legal actions.The administration must have a purpose and the Government encourages the use of company rescue mechanisms after administration. The 3 purposes (or objectives) of Administration Rescuing the company as a going concern. (Note: this purpose is to rescue the Company as opposed to rescuing the business undertaken by the Company.)Company rescue as a going concern – this is usually a  company voluntary arrangement. The company enters protective administration and is then restructured before entering into a CVA. The CVA would set out proposals for repayment of debts to secured, preferential and unsecured creditors. When the company has its CVA approved by creditors, then the administration process comes to an end after 28 days. Achieving a better result for the company's creditors This is as a whole than would be likely if the company was to be wound up (liquidation) See the differences between Administration and Liquidation.  This better result is usually obtained by selling the BUSINESS as a going concern to one or more buyers. The company and the debts are “left behind”. The better result may include securing transfer or employees under TUPE, as well as selling goodwill, intellectual property and assets. Controlling and then selling property/debtors. This is called realising assets. Then the administrator makes a distribution to one or more secured or preferential creditors, in order of creditors priority. Usually the business ceases trading and employees are made redundant.Only if the first two options are deemed unattainable, can the administrator use this third option.Under the administration option, it is possible for the company and its directors (or a creditor like the bank) to apply to the court to put the company into administration through a streamlined process.However, the law requires that any finance provider (like a bank or lender), with the appropriate security, is contacted and the aims of the administration be discussed and approved. The finance provider must have a fixed and floating charge (usually under a debenture) and the charge holder will need to give permission for the process to go ahead. Five days clear notice is required.  Be aware, though, that a secured lender can appoint administrators over a company without notice if it thinks its money is at risk.  So communication with the secured lender is essential.  

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What Does Going Into Administration Mean?

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