A frenetic bidding war for Matchesfashion.com, one of Britain’s fastest-growing online retailers, has sent its price-tag soaring to more than £800m as private equity groups try to grab a fresh slice of the luxury fashion market.
Sky News has learnt that final takeover offers for Matchesfashion are due imminently from at least three buyout firms.
The company’s husband-and-wife founders are said to be anticipating bids of a size that will propel them into the ranks of Britain’s wealthiest couples.
Matchesfashion, which sells brands such as Alexander McQueen, Balenciaga and Chloe, has seen stunning sales growth in recent years as wealthy consumers increasingly turn to digital platforms to buy expensive fashion items.
The company, which was set up by Tom and Ruth Chapman 30 years ago, has attracted interest from Apax Partners, KKR and Permira, with Bain Capital also understood to be interested.
The Chapmans own a controlling stake in Matchesfashion, meaning they are expected to walk away from a sale with a cheque for well over £400m.
A number of the private equity groups have experience of investing in the luxury sector and are said to have hired digital fashion retailing executives to assist with their bids.
Permira is a former owner of Valentino, the Italian luxury fashion house, while Apax bought a stake in Tommy Hilfiger – which it has since sold – in 2006.
Image: Tom and Ruth Chapman could walk away from a sale with more than £400m
Sources close to the Matchesfashion sale process said it was being run by Qatalyst Partners, a prominent technology-focused advisory firm based in San Francisco.
The luxury online retailer this year published details of its financial performance for the first time, underlining why buyout firms are clamouring to own it.
Set up 30 years ago as a boutique in Wimbledon, southwest London, Matchesfashion went online in 2007 and now sells more than 400 brands online and through three London stores.
Retail analysts say the business is comparable to Net-a-porter and Farfetch, another online-focused fashion site which is exploring plans for an initial public offering in New York that could see it valued at up to $5bn.
The rise of these multi-brand digital boutiques underlines the changing nature of luxury fashion retailing as premium labels strive to reach a wider audience and offer the convenience and ease of purchase more typically associated with cheaper competitors.
In full-year figures published in March, Mr Chapman, the executive co-chairman, said: “In recent years we have focused on building the foundations – of people, operations, and technology – to enable future growth, with a focus on driving an agile business at scale.
“The results to January 2017 demonstrate that we are now starting to deliver the return on the investment made.”
Sales during the period soared 61% to £204m, with earnings before interest, tax, depreciation and amortisation rising about sixfold to more than £19m.
A transaction involving Matchesfashion would value the business based on this year’s figures, which are likely to demonstrate further solid growth.
The Chapmans are not the only shareholders in the company they founded.
Two years ago, they appointed Ulric Jerome as Matchesfashion’s chief executive, triggering an acceleration of technology investment and the launch of a 90-minute delivery service in London.
In 2012, they sold a minority stake to Scottish Equity Partners and Highland Capital for £32m, with both firms set for a handsome return from their investments.
Sources said the Chapmans could opt to retain a significant shareholding or sell only a minority stake in the company, although their plans were unclear.
Matchesfashion declined to comment on Friday.
Source: Sky