Missguided, the fast-fashion chain famous for (barely) dressing Love Islanders, has been rescued from the brink of ruin by Mike Ashley's Frasers Group.
The Manchester-based company, known for its notorious £1 bikini, celebrity collabs (from Jordan Lipscombe to Gemma Collins), and bodycon dresses so tight you could pop bottle caps on them, was issued with a winding-up petition by creditors in May.
The i newspaper reported that millions are owed to suppliers and thousands in danger of losing their jobs in a ‘train crash’ situation.
But Ashley's Frasers, which owns the Sports Direct, House of Fraser and Flannels retail chains, has snapped it up for £20m. After the deal is complete, Missguided will continue to be operated by the administrator under a transitional agreement for about eight weeks before it becomes a standalone business within the Frasers Group.
That said, the administrators who have the job of winding up the company have said that customers expecting money back for returns are going to be disappointed: they won't be dishing out refunds. That's left many shoppers furious. And they're not the only ones.
Office workers at the online brand had allegedly stopped answering the phones as angry factory owners — who the i alleges are individually owned sums of up to £2m by Missguided — continually call demanding payment.
Suppliers even turned up at the retailer’s headquarters in Manchester on Tuesday after being ignored. Missguided called the police and sent all its staff home.
A spokesperson for Missguided said: 'Missguided is aware of the action being taken by certain creditors of the company in recent days, and is working urgently to address this. A process to identify a buyer with the required resources and platform for the business commenced in April and we expect to a provide an update on progress of that process in the near future.'
What is Missguided?
A would-be fast fashion behemoth from Manchester’s fabric belt. Well-groomed CEO Nitin Passi, 39, started Missguided in 2008 with a £50k loan from his dad, and was worth a staggering £250m in the 2019 Sunday Times Rich List. In Channel 4 documentary Inside Missguided: Made in Manchester he was revealed to own a palatial apartment in Chelsea, west London, a Chanel surfboard propped up in its hallway. He is also prone to showy gestures: in the doc, he suggests lending the marketing department one of his cars – a £350,000 Rolls-Royce – for a press stunt.
Why is it on the brink of collapse?
Supply chain disruption, overspending and inflation have combined to leave the company on the precipice of disaster, with the boost in online sales during the pandemic failing to translate to profits because of rising costs. It’s also been pummelled by beefy competitors like Boohoo, which owns brands including Pretty Little Thing, Karen Millen and Dorothy Perkins. Chinese fast-fashion company Shein, now valued at $100bn, is also turning the screw.
In December, Missguided slashed jobs and tried to stay afloat by selling half the business to Alteri, a private equity firm which focuses on struggling businesses. Soon afterwards, reports the i, clothing suppliers were told they would have to cut their prices by 30%, even on orders they had already delivered.
Does it still dress Love Islanders?
No. In 2018 Missguided signed an (undisclosed) partnership deal with ITV2 to feature its summer collections on Love Island — specifically, on contestants rippling torsos. Viewers could even shop the stars’ looks straight from the Love Island app, and Missguided reported that its sales had received a 40% boost. But the show has pivoted to sustainable fashion this year and has long since said goodbye to Missguided. It’s now partnered with eBay.
What’s this about a documentary?
Check it out on Netflix. CEO Passi needed a boost after a slew of PR disasters (an undercover investigation exposed a Missguided supplier in Leicester paying factory staff £3.25 an hour, allegations denied by the supplier) and after-tax loss of £46.7 million in 2017. The doc, shot by Missguided’s in-house team, is fascinating: loud and proud working-class women like Treasure (she’s fabulous) say they’ve made the leap from rags to riches from rags at the fast fashion brand’s candyfloss-hued headquarters, a place where flamingo ornaments are omnipresent and meeting rooms are named after emojis. It doesn’t shy away from the sins of fast fashion, either. Dig in.