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Matchesfashion to enter administration; stock markets rise on rate cut hopes – business live


Key events

Matchesfashion was launched by a couple, Tom and Ruth Chapman, who opened their first store in Wimbledon in south London in 1987.

They banked £400m after selling their online designer empire Matchesfashion.com to private equity investors in 2017.

Funds advised by Apax Partners, a firm that owns Karl Lagerfeld and previously invested in Tommy Hilfiger, agreed to buy a majority stake in the business in a deal that valued Matches at £800m. The Chapmans, both in their 50s, cashed in the vast majority of their 67% stake, and stepped back from day-to-day involvement but retained an advisory role.

However, the firm has struggled recently amid a slowdown in the luxury sector, and made a loss of £33.5m last year.

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Introduction: Matchesfashion to enter administration; stock markets rise on rate cut hopes

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Mike Ashley’s Frasers Group is putting Matchesfashion into administration, just weeks after buying the online luxury clothing retailer, putting hundreds of jobs in jeopardy.

Frasers bought the firm – which sells fashion brands including Balenciaga, Gucci, Prada, Stella McCartney and Valentino – for £52m from the private equity firm Apax in late December. According to reports, Teneo is being appointed as administrators.

In a statement to the stock exchange, Frasers said:

Since Frasers acquired Matches, the business has consistently missed its business plan targets and, notwithstanding support from the group, has continued to make material losses. Whilst Matchess’ management team has tried to try to find a way to stabilise the business, it has become clear that too much change would be required to restructure it, and the continued funding requirements would be far in excess of amounts that the group considers to be viable.

In light of this, Frasers has been informed that the directors of Matches have taken the decision to put the Matches group into administration. Frasers remains committed to the luxury market and its brand partners.

The news was first reported by Sky News.

Exclusive: Mike Ashley’s Frasers Group is putting Matchesfashion, the luxury online clothing platform it bought in December for £52m, into administration following weaker trading and the departure of a number of brands; a stock exchange announcement is likely tomorrow. More soon.

— Mark Kleinman (@MarkKleinmanSky) March 7, 2024

Asian shares have hit a seven-month high, after investors were cheered by hints for potential interest rate cuts in the summer, and ahead of a key US jobs report today.

They followed in the footsteps of higher US stocks, and the S&P 500 hit a record closing high of 5,157.34, up more than 1%, as the US Federal Reserve chief indicated rate cuts are likely to come this year.

MSCI’s broadest index of Asia-Pacific shares outside Japan peaked at 538.47 points, its highest level since August. Japan’s Nikkei rose 0.2% while Hong Kong’s Hang Seng gained 1.3% and the Shanghai Composite climbed 0.6%.

The European Central Bank kept interest rates unchanged yesterday and its president Christine Lagarde, who had been pushing back against the idea of early rate cuts, said at the press conference:

We did not discuss cuts for this meeting, but we are just beginning to discuss the dialling back of our restrictive stance.

She hinted strongly that this could happen at the ECB’s 6 June meeting, when wage data for the first quarter will have been published.

We will know a little more in April, but we will know a lot more in June

US Federal Reserve chair Jerome Powell struck a similar tone on the path of US rates. He said yesterday the US central bank was “not far” from gaining the confidence it needs in falling inflation to begin cutting borrowing costs. He told the Senate Banking Committee:

I think we are in the right place. We are waiting to become more confident that inflation is moving sustainably down to 2%. When we do get that confidence, and we’re not far from it, it will be appropriate to begin to dial back the level of restriction so that we don’t drive the economy into recession.

In Germany, industrial production rose by 1% in January from the previous month, but December’s decline was revised to 2% from 1.6%.

Construction recovered alongside the chemical and food industries and machine maintenance and assembly, while carmakers posted a 7.6% slump, official data showed this morning.

The Agenda

  • 10am GMT: Eurozone fourth-quarter GDP third estimate (forecast: 0%)

  • 1.30pm GMT: US non-farm payrolls for February (forecast: 200,000)

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