Frasers Group has reported a significant financial loss following its acquisition of Matches, as detailed in their recent financial results.
- The acquisition of Matches for £51.9m was followed by administration, leading to a £12.5m loss for Frasers Group.
- Despite a rise in adjusted profit, Frasers Group experienced a drop in overall profit before tax by 20.5%.
- Significant funding was provided to Matches, yet the continued financial losses were deemed unsustainable by Frasers Group.
- The closure of Matches’ website and its three stores followed the acquisition and subsequent administration process.
Frasers Group recently disclosed a financial loss of £12.5m linked to its acquisition of Matches. Despite initial optimism, the retail giant faced challenges that led to this setback.
The acquisition, completed on 20 December for £51.9m, was followed by the decision to put Matches into administration on 8 March. This resulted in a trading loss of £8.4m during this period.
Frasers Group’s financial report highlighted that despite an increase in adjusted profit before tax by 13.1% to £544.8m, there was a significant decline in overall profit before tax to £507m, down from £638m the previous year. This decline partly stemmed from the financial difficulties encountered with Matches.
After providing substantial financial support to Matches, Frasers Group found the continued losses unsustainable, stating that further funding would exceed viable amounts.
On 28 April, in an attempt to mitigate the losses, Frasers Group acquired the brand names and intellectual property of Matches for £20m, deducting this amount from the debt Matches owed to them. Subsequently, Matches’ website and its three London stores in Mayfair, Marylebone, and Wimbledon were closed.
The acquisition of Matches has posed significant financial challenges for Frasers Group, impacting its profit margins.
