The husband-and-wife team who founded Matchesfashion.com, the online luxury fashion boutique, are close to sealing the sale of their company for about £800m.
Sky News has learnt that Apax Partners, the private equity firm, was on Tuesday nearing a deal to acquire a controlling stake in Matchesfashion after a frenetic summer bidding war.
A sale of the business, which acts as a retailer of top fashion brands such as Balenciaga and Chloë, has not yet been signed, and City sources warned that Apax’s bid could yet be trumped by a rival.
Apax, which has previously invested in businesses such as Tommy Hilfiger, the fashion label, could nevertheless formalise a deal within a matter of days, they added.
If completed, the deal would catapult Tom and Ruth Chapman, Matchesfashion’s founders, into the ranks of Britain’s super-rich and cement their status as two of the country’s most successful retail entrepreneurs.
They set up the company in 1987 as a boutique in Wimbledon, south-west London, before taking it online 20 years later.
Image: Founders Tom and Ruth Chapman could walk away with at least £400m
It now sells more than 400 brands online and through three London stores, and bears comparison with rivals such as Net-a-porter and Farfetch, which is exploring plans for a $5bn stock market listing.
Matchesfashion has seen stunning sales growth in recent years as wealthy consumers turn to digital platforms to buy expensive fashion items.
As well as Apax, Bain Capital, KKR and Permira have also lodged offers for the company in recent weeks, and sources cautioned against ruling out a last-ditch counterbid from the rival firms.
The Chapmans own a controlling stake in Matchesfashion, meaning they are likely to walk away from a deal with a cheque for at least £400m.
They are being advised on the auction 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 have been clamouring to own it.
The rise of multi-brand digital boutiques such as Matchesfashion underlines the changing nature of luxury retailing as premium labels strive to reach a wider audience and offer the convenience usually 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.”
Image: The company has three high street stores in London
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 precise terms of a potential deal with Apax were unclear on Tuesday.
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 on their investments.
Spokesmen for Matchesfashion and Apax declined to comment on Friday.
Source: Sky News