Fast fashion brand Missguided on the verge of winding up FILE PHOTO: Nitin Passi arrives at the Sofia Richie x Missguided launch party at Bootsy Bellows on September 18, 2019 in West Hollywood, California. (Photo by Morgan Lieberman/Getty Images)
FASHION retailer Missguided may call in administrators as early as Monday (30) as it is on the brink of collapse after being issued a winding-up petition by creditors, the BBC reported.
Missguided, which has about 330 staff, was rescued last autumn by the finance firm Alteri Investors.
According to reports, the retailer has suffered from supply chain problems, rising freight costs and increasing competition from rivals like Boohoo and Chinese firm Shein.
In recent weeks Alteri has been trying to secure a sale of the fast-fashion business.
Insolvency specialists Teneo are advising Alteri on strategic options for the business. The BBC reported that it may step in as administrators if a solvent solution cannot be found.
Any buyer may likely try to do a deal via what is known as a pre-pack administration, which allows an insolvent firm to sell its assets to a bidder.
Earlier this week, suppliers turned up at Missguided’s Manchester headquarters demanding overdue payments and the retailer called for the police.
A supplier can apply to a court to close a company if it is unable to pay its debts. The idea is the firm’s assets are sold and those who are owed money will be paid.
Reports said that three suppliers for Missguided warned they are at risk of going under due to outstanding payments.
A Missguided spokesperson said that it is working urgently to address the action taken by creditors.
“A process to identify a buyer with the required resources and platform for the business commenced in April and we expect to provide an update on the progress of that process in the near future,” the spokesperson said.
Missguided was founded by Nitin Passi in 2009 and grew to become one of the UK’s biggest online fast-fashion players. The brand later expanded into Europe, the US and Australia and now ships to more than 180 countries.
However, in the last few years the business has struggled to make a profit and in December Alteri announced redundancies as part of a turnaround plan.
Passi stepped down as chief executive in April.
The firm began as a purely online retailer before adding several brick-and-mortar stores, including a flagship store in east London’s Westfield shopping centre in 2016. It has since shut all its physical shops in the UK.