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Burberry, Gucci, Bottega Veneta and Prada are among creditors owed £36m following Matchesfashion’s collapse, with hundreds of suppliers likely to receive less than a penny in the pound.
The luxury brands are among more than 500 unsecured creditors of Matches, the e-commerce site bought by Mike Ashley’s Frasers Group in December and placed into administration last month.
They are unlikely to be repaid, Teneo administrators said in a report this week; If this were the case, the amount would be “very low.” . . less than a penny in the pound”.
“Based on current knowledge, it is unlikely that sufficient funds will be made available to enable a distribution,” it said in documents filed with Companies House.
Gucci was owed £553,338, Burberry £467,525, Bottega Veneta £326,564 and Prada £281,069, among other established and emerging luxury brands.
However, administrators said they expected a full payment of almost £300,000 to staff and £1.2 million to HMRC.
Matches was bought by Frasers for £52m in December. When Matches went into administration, Frasers said the company had “consistently failed to meet the targets of its business plan and this was despite the support of [Frasers]continued to make significant losses.”
Teneo said it had received 11 offers for parts of the business since his appointment and was now negotiating with potential suitors “to achieve the optimal outcome” for stakeholders.
Administrators eliminated 264 positions as a result of her appointment, retained 265 and more than a dozen have since resigned. Employees also had to vacate their offices in London last month while the administration sold the furniture.
For many of the smaller brands that Matches carries, the collapse of the business was a major blow. Matches Alighieri, an independent jewelry brand based in London, owes around £70,000 as of October, according to founder Rosh Mahtani.
Matches also still has Aligheri stock in its warehouse, which Mahtani is now unlikely to recover, but will continue to be sold on the e-commerce site. “Every single independent brand I know is having a really tough time right now,” she said.
After Frasers purchased Matchesfashion, the company quickly implemented several strategic decisions that seemingly backfired. Frasers failed to pay around 200 brands, which in turn refused to ship new stock. Under its new ownership, Matches also eliminated VIP perks and free shipping and pushed brands for discounts of up to 30 percent to get paid.
Sales plummeted in January and February. The discounts particularly angered brands, causing leading labels such as Kering-owned Saint Laurent, LVMH’s Loewe and The Row to cut ties.
Frasers declined to comment.
Separately, Prada announced a strong start to the year on Wednesday, increasing like-for-like sales 16 percent to 1.19 billion euros, beating expectations as sales of its Miu Miu brand rose about 90 percent. Analysts at Bernstein highlighted that Prada is second only to ultra-high-end Brunello Cucinelli in terms of luxury sales growth this quarter.