Ashley, who founded British retail conglomerate Frasers Group Plc and is its biggest shareholder, has a chance to revive Matches’ fortunes, but only if luxury leaders such as Arnault, Prada SpA co-creative director Miuccia Prada and Gucci-owner Kering SA Chief Executive Officer Francois-Henri Pinault play ball.Although best known for selling cheap tracksuits through his Sports Direct chain, Ashley has been quietly building a luxury portfolio. He bought the upmarket retailer Flannels in 2012 and added fancy but failing department store House of Fraser in 2018. Frasers’ premium lifestyle division, which includes both Flannels and House of Fraser, generated £1.2 billion ($1.5 billion) of revenue in the year ended April 30, though it didn’t make a profit in the period due to the loss of Covid-era tax relief, one-time charges and House of Fraser store closures. Flannels had been flying until recently, when the cost-of-living crisis and higher interest rates began to squeeze its well-heeled customers.

Acquiring Matches, which generated £760 million of orders in the year to Jan. 31, is an opportunity for Ashley to increase his luxury footprint. He got a good deal: He’s paying about £52 million in cash for the business — way below the reported $1 billion paid by Apax Partners in 2017.Matches adds to Frasers’ so-called “elevation strategy,” which is being led by CEO Michael Murray, Ashley’s son-in-law who took the helm of the business in May 2022. It should bring a broader range of brands into Frasers’ luxury ecosystem and also expand the premium lifestyle division’s international reach, as Matches delivers to 150 countries outside of the UK. The online seller has a strong house brand, too, in the form of Raey — a premium apparel name beloved of fashion editors and this columnist. Frasers’ Sports Direct division has a roster of private labels, such as Lonsdale, Everlast and Karrimor, so it knows how to manage owned brands. Ashley is also a master cost-cutter, and there will be plenty to go for at Matches, starting with the townhouse it leases in London on Carlos Place, close to Mount Street, home to French leather-goods maker Goyard and Prada’s Marchesi café. And Frasers has its own loyalty program-meets-credit-facility that it could roll out to Matches.But there are risks. Buying in designer clothing and handbags to offer to customers is expensive to start with. It is also notoriously difficult to make a profit from e-commerce; due to the cost of deliveries and returns, Matches made an underlying loss of £33.7 million in fiscal year 2022. This is even more challenging in upmarket online retail, as discerning customers require superior service. Flannels may be able to help here, perhaps by offering the opportunity to order via Matches and collect through the chain.However, the biggest danger is that top-end brands won’t want to keep supplying Matches under Ashley’s ownership. They have been cutting back on selling through third-party retailers, choosing instead to serve customers only through their own stores and websites. This is one of the factors that hurt luxury marketplace Farfetch Ltd, which was rescued by US-listed South Korean e-commerce company Coupang Inc. this week.Murray will have to convince the biggest players in the luxury industry that Matches, and by extension Flannels, won’t cheapen their image. There is a decent chance of doing this, as Sports Direct now receives top products from Nike Inc. and Adidas AG, thanks to Murray’s having ditched Sports Direct’s “pile it high, sell it cheap” strategy with upgraded stores, such as a five-story Manchester flagship. And in luxury, the group has forged close ties with Hugo Boss AG, partly by investing in the German suitmaker.But the rarefied world of luxury is different to that of sneakers. To be the British Arnault, Ashley will have to show that he really has swapped his tracksuit for Tiffany jewels.