What happened to Missguided? Details explored as online clothing retailer nears bankruptcy
Missguided was set to appoint administrators after creditor JSK Fashions served the company with a liquidation petition earlier in May.
The online fashion giant is still on the brink of bankruptcy after it allegedly owed suppliers millions of pounds, prompting police to be called to the company’s headquarters in Manchester.
Alteri Investors, which saved Missguided from bankruptcy in 2021 by buying a 50% stake in the company, bought the business in recent weeks with JD Sports and Shein expected to make offers.
Teneo, an insolvency company, is preparing to take over as administrators if Alteri is unable to liquidate the company.
Missguided’s financial struggles explained
The clothing company has been accused of failing to pay its suppliers and is on the verge of bankruptcy.
Police were reportedly called to the company’s headquarters in Manchester in response to the supplier’s allegations.
The creditors have filed for liquidation and the case will be heard in court in Manchester in July. According to the newspaper, three suppliers have warned that they risk going bankrupt due to unpaid invoices.
However, an angry supplier reported he had to sell his wife and mother’s wedding jewelery to raise £40,000 to pay staff salaries. They claimed they would be broke if Missguided went bankrupt.
According to reports, the online fashion giant confirmed:
“Missguided is aware of the actions taken by some of the company’s creditors in recent days and is working urgently to address them. A process to identify a buyer with the resources and platform necessary for the company has started in April and we plan to provide an update on the progress of this process in the near future.
It comes after the company went through a series of layoffs in December to stay afloat. He also sold half of the company to private equity firm Alteri.
Missguided was founded in 2009 and sold its clothes on major fashion sites such as ASOS and Zalando. According to reports, he employs around 400 people in Manchester.
Last summer, the online fashion giant announced it would sell clothes in 100 Asda stores across the UK.
In February, Studio Retail also appointed administrators, leaving thousands of customers waiting for their orders. Fraser Group bought them out, preventing it from going bankrupt.
However, Teneo was hired by the company last month to assess strategic options, and it is now understood the business advisory firm will oversee any insolvency process.
What precautions were taken?
Alteri has been working to improve the company’s operations since buying the retailer in December.
The company reported “good operational progress in recent months”. He focused on resolving inventory issues, streamlining warehouse operations and reducing head office costs.
However, there have been layoffs. It was warned earlier this year that 140 jobs were at risk, but after consultations and measures such as redeployment and voluntary redundancy, that number was reduced to just over 60.