SEP invests £12m in UK luxury fashion

The Glasgow-headquartered firm invested 100% equity from the £200m Scottish Equity Partners fund IV.

Scottish Equity Partners (SEP) has acquired a stake in Matches, a UK based luxury fashion retailer, it said in a statement. The precise stake was undisclosed, but Andrew Davison, a partner at the firm, told Private Equity International, the firm is now “one of the larger shareholders in the business”.

The firm made the investment using its £200m Scottish Equity Partners fund IV, which was established in 2011. This will be the fourth investment from this fund.

The investment will enable Matches to further expand its growing online sales, with a focus on key international markets. It will also continue to invest in its 14 luxury stores across London. The company doubled its online sales from 2011 and will close 2012 with a turnover of more than £50 million, the statement said. The investment was led by Davison, who has joined the company’s board of directors.

Davison said in the statement: “We are delighted to be the company’s first private equity backer. Our investment will enable the company to expand its online operations and cement its position as a leading global fashion business.”

The high-end luxury fashion market is growing, despite the current economic downturn, Davison said. “This sector is proving to be very robust. Matches has a very wealthy customer base. These are individuals with a high net disposable income from the UK as well as from emerging upper-classes in China and Middle Eastern countries and they are still spending very strongly.”

Despite the company’s growing sales, it is unlikely to open more stores in the UK. “We may open small outlet stores in strategic countries or cities around the world as we look to support our global expansion. But the growth of this business has to be found in its online activities,” Davison said.