Missguided, a UK-based online retail fashion company, has been bought by Fraser Group for £20 million (€23.5 million) after it went into administration on Monday, leaving customers unsure whether their orders will be delivered and suppliers with millions out of pocket.
The dramatic collapse came months after the company first reported financial difficulties last autumn. Private equity firm Alteri then bought a controlling stake in December, although it was not enough to save the struggling business.
Founded in 2009 by Nitin Passi, who left the company in April, Missguided has now closed down its online store and customer services, pending its integration into Fraser Group’s portfolio of companies, which include Sports Direct and House of Fraser. Fraser Group is owned by British billionaire Mike Ashley.
However, The Guardian reports that advisory firm Teneo, who are acting as controllers of the company, “are not in a position to pay refunds requested before they were appointed on Monday”.
This means that thousands of customers could be left out of pocket, with many fuming that the online shop remained operational on Monday and Tuesday, by when it was clear that the company would not be able to honour its commitments.
Similarly, suppliers are furious at Alteri, with some saying they are on the brink of collapse as they await payments running to the hundreds of thousands.
Legal action may follow, with one supplier saying he believed Missguided could have acted fraudulently if it continued to place orders while “administration was on the horizon”. An official complaint has already been filed with the UK’s Insolvency Service, citing the owners’ “reckless approach”.
Meanwhile, staff are also mulling filing a suit over claims that the redundancy process was not properly managed, with almost 90 head office staff being informed that they were being made redundant via a pre-recorded audio conference call with less than a half hour’s notice to clear their desks and vacate the premises.
Security guards were reportedly stationed at Missguided’s headquarters on Tuesday to ensure dismissed staff did not try to return.
The company’s collapse is seemingly related to a downturn in sales as high street fashion made a post-pandemic comeback, cutting into online purchases, combined with increasing supply chain costs and delays.
Missguided is represented locally by Hudson Group, which operates an outlet dedicated to the brand at St Julian’s Bay Street. Questions sent to Hudson about the future of the brand in Malta were not immediately replied to.
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