The end of August might represent the dog days of summer, but in the U.K. it was business as usual for retail.
Frasers Group continues its acquisitive streak, raising its stake in Boohoo. Over at Matches, formerly Matchesfashion, CEO Nick Beighton reportedly is setting in motion a restructuring plan that includes a reduction in headcount. Stitch Fix is winding down its personal styling service in the U.K. And Next Plc CEO Simon Wolfson made good on his promise in April that more acquisitions could be on the way, this time upping its stake in fashion rival Reiss Ltd.
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Michael Ashley’s Frasers Group raised its stake in the fast-fashion e-tailer to 10.4 percent, according to the company on Friday.
The previous stake was 9.1 percent, up from 7.8 percent, according to a company statement on Thursday.
Public filings indicate that Frasers, now under the leadership of CEO Michael Murray, made its first “strategic investment” in Boohoo in June. One month later, Frasers raised its stake to 6.8 percent from 5 percent. The company’s growing interest in e-tail and fast fashion complements its ownership of Missguided and I Saw It First.
Frasers also has a 10.6 percent equity stake in Asos. In addition, the company holds another 8.7 percent in voting rights via sold put options that expire beginning in September 2023 through January 2024.
Luxury online fashion retailer Matches could be in reduction mode as it reviews its operational structure.
“We have reviewed our structure to make efficiencies in the business including not backfilling some vacated roles,” a Matches spokesperson told Drapers, which reported on the layoffs on Thursday.
Private equity firm Apax Partners has owned a majority stake in Matches, then known as Matchesfashion.com, since 2017. Nick Beighton, former CEO of fast-fashion chain Asos, became the new chief executive at Matches in July 2022, the fourth since Apax acquired its stake. Known for his financial acumen—he was head of finance at Matalan before joining Asos in 2009 as chief financial officer and then becoming its CEO in 2015—Beighton now has oversight for turning around the Matches operation.
At the start of 2023, Apax provided 60 million pounds ($73.2 million) in new funding into the business, comprised of 40 million pounds ($48.8 million) in equity and 20 million pounds ($24.4 million) in debt. The cash infusion was thought to be a show of confidence by Apax in Beighton’s turnaround plan.
Matches isn’t the only one cutting jobs. Its online luxury fashion competitor Farfetch Ltd. also cut jobs this year. In the company’s second quarter earnings call on Aug. 18, CEO José Neves spoke about Farfetch’s cost and capital allocation, which resulted in a “complete redesign of our organization structure” and a bolstering of its leadership team. Cost-cutting measures also resulted in the elimination of 11 percent or its workforce in New York and the U.K., or 800 positions.
Stitch Fix exits U.K. market
Personal styling platform Stitch Fix has confirmed its exit from the U.K.
The confirmation was through an Instagram post on its U.K. account. “Stitch Fix was inspired by a very human problem: to help people look and feel their best by finding clothes they love. Over the past four years, we’re proud to have helped thousands of people in the UK discover their personal style,” the post began.
The post ended with just one line: “Now, we’re sorry to say that our Stitch Fix UK journey is coming to an end.”
A followup post indicated a “Thank you sale” with 70 percent and 50 percent off for those buying either five items or four, respectively. Styling boxes are expected to continue to be shipped to customers for at least two more months as the company conducts an orderly wind-down of operations.
The company began evaluating operations in the U.K. in June, the same time it elected to not renew its lease on a fulfillment center in Bethlehem, Pa. That center is expected to close by October, with a Dallas fulfillment center slated to close next year. Despite using algorithms and data science to personalize curated boxes each month, the company remains unprofitable. In the same month, Matt Baer, former chief customer and digital officer at Macy’s Inc., joined Stitch Fix on June 26 as its new CEO. Former interim CEO and founder Katrina Lake remains on the company’s board as executive chairperson.
Next and the Reiss family are set to acquire Warburg Pincus’ remaining 34 percent stake in Reiss Group for 128 million pounds ($162.1 million).
The transaction, expected to be completed in mid-October, will increase Next’s stake to 72 percent from 51 percent. The Reiss family’s stake will increase to 22 percent and the Reiss management team will hold a 6 percent equity position in the business. Following completion of the deal, Next will begin including Reiss results in its consolidated earnings reports.
Next said on Friday that Reiss has seen continued growth with CEO Christos Angelides at the helm. He will remain in the role following the close of the transaction. For the year ended Jan. 28, 2023, profit before tax was 51.6 million pounds ($64 million), and increase of 50 percent from the prior year. Total sales at Reiss was 324.6 million pounds ($402.5 million), up 26.4 percent from the year-ago period.
Reiss will continue to retain its own board of directors, as well as autonomy and creative independence in the business. Reiss’ websites and digital businesses in the U.K. and overseas are hosted on Next’s Total Platform, which also has provided warehousing and distribution services for retail, wholesale and concession since February 2022.
Next first acquired its initial 25 percent in Reiss from Warburg Pincus in March 2021.