Missguided, an online fashion retailer based in the U.K., is on the verge of collapse after it was issued with a winding up petition by one its apparel suppliers.
According to reports, the company is close to calling Teneo administrators as soon as Monday. This comes after police officers were called to Teneo’s Manchester, U.K. headquarters by law enforcement officers when suppliers arrived earlier this week demanding payment. They claim they owe millions of dollars.
JKS Fashions, a Manchester-based clothing supplier, issued a winding up petition against Missguided on May 10, and creditors applied for compulsory liquidation. A Manchester court is expected to rule in the case in July.
U.K. media reports have reported that Missguided’s three suppliers have warned them that they could go bankrupt due to outstanding payments. It is also believed that some U.K. or international suppliers have not received payment for several months.
This news comes after months and months of speculation regarding the future of Missguided. Once a darling among female Gen Z customers, it has been a victim of skyrocketing transportation and production costs, as well as the squeeze on shoppers’ budgets. It has also been criticised for its gimmicky sales, offering products for less than a dollar, along with other fast fashion retailers.
Missguided saves Collapse
The online retailer was saved from collapse by Alteri, an investment firm Apollo. Alteri took a 50% stake and also agreed to pay its mounting debts.
Alteri announced in December a series of redundancies as part of a restructuring of the company. Last month Missguided confirmed that the company was seeking a buyer. The colourful founder of Missguided, Nitin Passi, has resigned as chief executive, although he remains on the board.
Potential suitors include JD Sports, a U.K-based fashion retailer that sells sports clothing, and Shein, a Chinese-backed fashion company.
Missguided hired Teneo last month to evaluate its strategic options. It is now understood that the corporate advisory company would supervise any insolvency proceedings.
According to the company, the statement related to the latest reports stated that Missguided was aware of the actions taken by some creditors in recent days and is working quickly to rectify this. In April, a process began to find a buyer who has the right resources and platforms to buy the business. We expect to update you on the progress of this process in the near future.
Missguided, founded in 2009 by Nitin Pasi, was once a shining star among a new wave online fast fashion brands. It resonated with Gen Z customers and rose at a time many traditional apparel retailers were failing.
The company saw great growth in its domestic markets and expanded into Australia, France, Germany and France. It also opened a number irreverent flagship shops as it moved out of being an exclusively online player. However, the company was severely affected by recent delivery disruptions and cost increases. Demand decreased as people couldn’t travel out during the pandemic.