Missguided, the online fashion specialist, called administrators after failing to secure a ransom offer.
Teneo’s administrators were appointed on Monday after the company received a liquidation petition from clothing suppliers who are owed millions of pounds. Around 140 jobs are believed to be at risk and one source says more than 80 people were immediately made redundant.
Boohoo, a larger online fashion specialist, had been in talks to buy Missguided in a prepack management deal, while JD Sports and Asos are also believed to have had a look, but a deal could not be closed.
The administrators said Missguided would continue to operate as they seek to complete the sale of the business and assets.
Gavin Maher, managing director of Teneo, said: “The UK retail environment remains extremely challenging”, but added that Missguided had generated “a high level of interest from a number of strategic buyers”.
The company was still receiving orders on Monday, but it was unclear whether the group’s distribution partner, GXO, was still handling those orders.
Some of the online retailer’s suppliers in the UK and abroad told The Guardian they hadn’t been paid for months and several said they had already taken a hit in December when they were asked for a 30% discount on products. agreed orders.
A Leicester-based factory owner said he was owed more than £2m and had been forced to send his more than 90 workers home because he couldn’t pay them. He said that without payment he may be forced to call administrators since he has not been paid since April. “This is completely unethical,” he said. “I am absolutely disgusted.”
Another Leicester supplier said he was owed around £600,000 and was not sure the business could survive without orders from Missguided, which did the vast majority of his work. “I have already fired 10 people. It’s hard to get another job because of the economy right now – customers are not accepting new vendors,” he said.
“This is going to have a huge impact on our business. We are not sure if we can trade as we have to pay our suppliers. It’s just shocking.”
Founded in 2009 by Nitin Passi, Missguided was one of the few online fashion brands to succeed at a time when shoppers were increasingly turning their backs on the traditional high street.
The business was established with a £50,000 loan from Passi’s father, who was originally from India and made a fortune establishing the high street outfitter By Design after arriving in the UK in the 1960s.
During the pandemic, the company enjoyed rapid growth but has struggled since brick-and-mortar stores reopened and purchasing power took a hit from the cost-of-living crisis.
Last fall, the online retailer was saved from collapse when retail investor Alteri, backed by investment firm Apollo, stepped in.
Last month, Missguided said it was looking for new investment when Passi stepped down as chief executive.
Source: www.theguardian.com