Frasers Group, controlled by Sports Direct founder Mike Ashley, has bought online fashion retailer Missguided out of administration for £20m in cash.
Frasers, owner of the Sports Direct, House of Fraser and Flannels retail chains, announced that it had acquired certain intellectual property from Missguided Ltd and related firms Mennace Ltd and Missguided (IP) Ltd, in a working capital financed purchase.
Once the deal is complete, the manager will continue to operate Missguided under a transition agreement for approximately eight weeks before it becomes an independent business within the Frasers Group.
Michael Murray, CEO of Frasers Group, said the company was “delighted to secure a long-term future for Missguided”, adding that it “would benefit from the strength and scale of the Frasers Group platform and our operational excellence.” .
He said: “Missguided’s first digital approach to the latest trends in womenswear will bring additional expertise to the Frasers Group as a whole.”
Missguided collapsed into administration on Monday after the company received a liquidation petition from clothing suppliers who are owed millions of pounds, putting around 140 jobs at risk.
It is not yet clear how many jobs will be saved by the purchase of Frasers. A source told The Guardian this week that around 80 positions were made redundant immediately after the company went into administration.
Teneo managers failed to secure a last-minute redemption offer for Missguided, who made headlines in her £1 bikini three years ago, selling them at a loss as a marketing gimmick.
The fast fashion company, founded in 2009 by Nitin Passi, ran into financial difficulties last fall. It was saved from collapse when private equity firm Alteri stepped in, bought a majority stake and took a seat on the board. Subsequently, Passi left the company.
In recent months, it was understood that some of Missguided’s fashion suppliers in the UK and abroad had not been paid.
The Guardian knows that more than a dozen UK suppliers report that they are collectively owed millions of pounds for orders, some of which were placed as late as last month.
There was some speculation that online fashion’s biggest rival, Boohoo, would step in to buy Missguided as part of a pre-pack management deal. However, the talks were ultimately unsuccessful.
Missguided was among a small group of internet fashion businesses that grew in popularity at a time when traditional high street and established retailers were battling it out. It initially enjoyed rapid growth in its home UK market, raising its profile through sponsorship of reality TV show Love Island, before expanding to the US, Australia, France and Germany.
The company’s largely female workforce at its Manchester headquarters and tough negotiations with suppliers were highlighted in a documentary broadcast on Channel 4 in 2020.
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Missguided is just the latest brand Ashley has thrown into her basket as part of a retail shopping spree, snapping up struggling brands like Evans Cycles, Jack Wills and online specialist Studio Retail.
The acquisition of Missguided is a “punch worth taking” for the Frasers Group, according to Darcey Jupp, apparel analyst at GlobalData. “Operating Missguided as a standalone brand is a wise move, as their young target audience would not be inclined to buy into their other fascias like House of Fraser,” she said.
Jupp said Frasers would have to ensure that Missguided’s clothing was “trend driven and competitively priced”, adding: “With inflation spiraling in the UK, there is an opportunity for Missguided to capture young consumers. that they are willing to continue buying clothes but that they must trade down.”
Source: www.theguardian.com