Dan Smith, Daniel Butters and Benjo Dymant of Teneo were appointed as joint administrators for fast-fashion brand Missguided on Monday after it was reportedly issued with a winding-up petition by clothing suppliers who are owed millions of pounds.
Teneo says the retail trading environment in the UK remains extremely challenging and like many retailers, Missguided has suffered from increased supply chain costs, general cost inflation and softening consumer confidence in an increasingly competitive market.
Joint administrators are now looking to conclude a sale of the business and assets of the brand which had been founded by Nitin Passi in 2009 and grew to around three million customers.
Passi stepped down from his role as chief executive last month and the company was understood to be cutting 63 jobs alongside appointing Teneo as an investor to “explore strategic options” for the company.
Last autumn, the online retailer was saved from collapse when the retail investor Alteri, backed by investment firm Apollo, stepped in. Alteri announced redundancies in December as part of a turnaround plan.
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In a statement issued yesterday (30 May) Gavin Maher of Teneo, said: “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. We thank all employees and other key stakeholders for their support at this difficult time.”
Boohoo is reported to be one of the parties interested in Missguided. The Nasty Gal, Pretty Little Thing and Debenhams owner, however, did not return a request for comment when approached by Just Style.
Missguided will continue to trade while a buyer of the business is sought.
Commenting on the news, GlobalData apparel analyst Darcey Jupp, says while media reports have linked the collapse to increased sustainability issues, it is clear from the continued growth of its rivals that its failure is down to its own lack of competitiveness rather than sudden fall in demand for fast fashion.
“The true reason for its demise was its lack of competitiveness with the likes of Shein and Boohoo. While many UK pureplays have struggled to continue their pandemic momentum in 2021 as in-person shopping returned, Missguided has slipped further than most, with its lack of high-profile celebrity collaborations and uncompetitive pricing contributing to the brand losing the lucrative attention of young shoppers in the UK fast fashion market.
“Missguided’s failed venture into physical retail would have certainly put another nail in the coffin, as the brand opened expensive and uninspiring stores that were unable to maintain footfall, leading to their subsequent closures. While its launch of concessions in some ASDA stores had the potential to be successful, this was evidently not enough to rescue the struggling brand.
“At present, the Boohoo group appears to be the frontrunner to rescue Missguided, and this acquisition certainly has the potential to revive the brand. The Boohoo group has a reputation of rescuing struggling apparel players, and its similar proposition means it is best-placed to take on the Missguided brand than the other interested players, including JD Sports and ASOS.”