Missguided’s venture into administration showcases a “new retail reality”

Fast fashion firm Missguided has collapsed into administration after failing to finalise a rescue deal.

A winding-up petition had been issued by Missguided’s clothing suppliers, who they owe millions, which led to the firm appointing Teneo Financial Advisory as their administrator on Monday.

Missguided had hired Teneo in April to help it find a new buyer. Boohoo, JD Sports, Shein and Frasers Group all showed interest in the firm but ultimately, a rescue deal was unable to be secured.

According to the Guardian, 140 of Missguided’s 340 staff are at risk of redundancy, whilst more than 80 people had already been made redundant. 63 employees were also let go in April.

Teneo Senior Managing Director Gavin Maher commented on the announcement: “As we continue to see, the retail trading environment in the UK remains extremely challenging. 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.”

Missguided will continue to trade while in administration as Teneo look to sell the business.

“New retail reality”

Dr Gordon Fletcher, retail expert from the University of Salford Business School, says Missguided’s collapse showcases the new retail landscape that we’re currently seeing.

“With online fashion retailer Missguided falling into administration there is a new retail reality. Until so recently a leading light of the young online upstart fast fashion, there has been warning signals since December when the Founder, Nitin Passi, gave up significant control of the company in a deal that brought a cash injection from equity capital firm Alteri.

“Last month Passi also gave up control as the company’s CEO. The company will continue to retail under the supervision of administrators until a buyer can be found. The company has had a controversial history and unwillingly has had a central role in raising the public debate about the ethics of fast fashion in terms of environmental sustainability as well as the wages that suppliers pay their workers in order to hit the expected price points of consumers.

“But the desire of consumers to enjoy post-lockdown experiences including high street shopping coupled with an increasing squeeze on household disposable income has doubled the crisis in which Missguided has found itself. Fashion, and especially fast fashion, can be a marginal business when people look for ways to save money. The result is renewed interest in more sustainable consumption practice including going ‘vintage’ as well as upcycling and repurposing old wardrobe items.”