UK-headquartered online fast fashion retailer Missguided has collapsed after a last-minute rescue backed by rival Boohoo — and potential bids by Shein, JD Sports and Frasers Group — all fell through.
The company has appointed Teneo Financial Advisory — the agency trying to negotiate a sale of the ailing business — as administrator. Teneo says the business will continue to trade while its future is determined, but The Guardian reported more than 80 staff were immediately made redundant with another 260 jobs at risk if the company cannot be salvaged.
Missguided owes millions of pounds to suppliers, who lodged a winding-up petition on Monday.
“The joint administrators will now seek to conclude a sale of the business and assets, for which there continues to be a high level of interest from a number of strategic buyers,” said Teneo senior managing director Gavin Maher.
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“As we continue to see, the retail trading environment in the UK remains extremely challenging.”
Described by Retail Gazette as once being “an online fashion success story” Missguided had “failed to keep pace with bigger competitors Boohoo and Asos in recent years”.
Founded online in 2009, Missguided seemed to start off well in the digital space, but a foray into brick-and-mortar retailing from 2016 appears to have ultimately sealed its fate.
After closing a flagship store in Westfield London with two years of its lease left in February 2019, the company began to pursue an overseas expansion program, opening stores in markets as diverse as the UAE, Vietnam and Egypt under distribution partnerships. It had an Australian online storefront which is currently unreachable.
Late last year Alteri, an investment company that specialises in distressed businesses, took a 50% stake in Missguided in return for emergency funding. When founder Nitin Passi resigned as CEO, Alteri called in Teneo to advise on long-term rescue options.
Passi launched the company using a loan of £50,000 from his father, an Indian immigrant who made a fortune in the rag trade by setting up a high street supplier By Design in the 1960s.
The Guardian has reported that some UK suppliers are on the brink after not being paid by Missguided, including a Leicester-based factory owner who is owed more than £2 million and was forced to lay off 90 staff because he could no longer pay them. He claimed not to have been paid since April.
“This is completely unethical,” he told The Guardian. “I am absolutely disgusted.”
This article was first published by Inside Retail.