Yahoo Finance Brands Call In Lawyers to Deal With Matches Bankruptcy Headache
LONDON — As Matches grinds its way through a bankruptcy process under administrators Teneo, brands and suppliers have been tapping lawyers to help them recoup outstanding payments and warehouse stock although they may come away disappointed.
“We’re trying to find a constructive, commercial solution, but it’s hard to get a dialogue going because the people we originally partnered with are all gone,” said Ulrik Garde Due, chairman of the Danish brand Cecilie Bahnsen, a longtime Matches supplier.
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Although the brand’s lawyers are in touch with the administrators, the process still has to play out before anything is resolved. Administration can take up to a year, although industry sources believe the team at Teneo Financial Advisory Ltd. could find buyers for all, or parts, of Matches within the next few months.
Until then brands will have to wait. Under English corporate insolvency rules, creditors cannot take legal action against a company that’s been placed into administration. As for the inventory on the shop floor and in the warehouse, that remains the property of the administrators, whether or not Matches has already paid for it.
Garde Due, who declined to specify how much the company is owed, said he is relieved about one thing.
“They’re not discounting too heavily,” he said.
The Matches U.K. site is offering 25 percent off thousands of items from brands including The Row, Toteme, Alaïa, Valentino and Dries Van Noten. Other merchandise is selling at full price.
Cecilie Bahnsen isn’t the only brand waiting for answers. Hundreds of companies sell through Matches and most of them had wholesale agreements. By contrast, the large luxury groups, such as Kering, usually have e-concessions with multibrand retailers, which means they control their own inventory.
As reported, Kering has stopped selling Saint Laurent and its other brands through the site.
London-based designer Anissa Kermiche, known for her sculptural jewelry and homeware designs, said Matches owes her 32,000 pounds.
“I am furious,” said Kermiche, adding that she has cancelled all future orders. She added that she has not been given any information from the company or the administrators, nor does she know what will happen to the inventory that’s currently on the Matches website.
A host of other brands contacted by WWD declined to comment, but confirmed they had retained lawyers to help them claw back inventory, and press for outstanding payment. Customers have been struggling, too, with all returns and refunds frozen per the administration process.
Teneo declined to comment.
Matches’ new owners, the publicly quoted Frasers Group, shocked the market last month when it put the luxury retailer into administration within months of purchasing it at a knockdown price of 52 million pounds.
After looking at the books, Frasers concluded the company was too expensive to bankroll against a backdrop of dwindling demand for luxury goods and a persistent cost-of-living crisis.
At the time, Teneo’s administrators Benji Dymant and Julian Heathcote said: “Since Frasers’ acquisition of Matches in December 2023, and an injection of additional funding, trading has continued to deteriorate, increasing the funding requirements of the business. This ultimately has resulted in the directors taking the difficult decision to place the company into administration.”
Dymant and Heathcote confirmed that Matches would continue to trade through its website and three London stores, in Mayfair, Marylebone and Wimbledon, during the sale process. The aim is to sell as much as possible without resorting to heavy discounting.
As reported, the distress sale of the site could see the high street and digital platform giant Next plc return as an interested party. Late last year Next was competing with Frasers Group to purchase Matches.
Frasers could also reemerge as a buyer. Under English law, it has every right to buy Matches back — without its debts. Industry experts say it’s perfectly normal for a secured lender of a business to be a bidder for the assets in administration, and it happens often.
It would come as no surprise if Frasers Group founder Mike Ashely did just that. Ashley specializes in buying distressed companies, and is always prowling for stock to fill the stores in the Frasers portfolio, which includes multibrand fashion retailers Flannels, House of Fraser, 18Montrose and Savile Row tailor Gieves & Hawkes.
Before Christmas, Frasers was reported to have been eyeing Browns, but more for the inventory than for the physical store. The London-based Browns was part of Farfetch, which was bought by Coupang last year as part of a distress sale. Frasers declined to comment for this story.
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