Fashion brand Missguided on the brink of collapse

MISSGUIDED is lining up administrators as the fast-fashion seller teeters on the brink of collapse after being issued with a winding-up petition by creditors.

Police were reportedly called to its head office in Manchester after angry suppliers turned up after being left millions of pounds out of pocket.

A winding up petition was issued against Missguided on May 10 by Manchester-based supplier JSK Fashions, according to court filings.

Alteri Investors, which saved Missguided from collapse last autumn, has been scrambling to offload the company over the last few weeks, with JD Sports and Chinese-backed rival Shein linked with making a bid.

But industry insiders have repeatedly warned that suitors are more likely to wait and buy the business out of bankruptcy. Insolvency specialists Teneo are understood to be preparing to step in as administrators if the business cannot be sold solvently.

Office workers are said to have stopped answering phone calls from factory owners, according to the i, which first reported Missguided’s potential failure. Three factory owners told the newspaper that they are also at risk of going bankrupt after Missguided failed to pay them for clothing. One even said he had to sell his wife’s jewellery to pay his staff.

Alteri, a distressed investor that is backed by Wall Street investment giant Apollo, has pumped millions of pounds into Missguided since the start of the year. It paid £53m for the business.

Multimillionaire Nitin Passi, who set Missguided up 12 years ago with a £50,000 loan from his father, stepped down as chief executive last month but remains on the board of the online retailer’s parent company. He is no longer believed to own a majority stake.

Ian Gray, Missguided’s chairman, has insisted that he was optimistic about the prospect of selling the business.

Missguided was a pioneer in capitalising on celebrity endorsements over social media to promote its clothes. A fitness fanatic who owns a pink Lamborghini, Mr Passi is said to have repaid his father’s loan within six months.

A spokesman for Missguided said: “Missguided is aware of the action being taken by certain creditors of the company in recent days, and is working urgently to address this. A process to identify a buyer with the required resources and platform for the business commenced in April and we expect to provide an update on progress of that process in the near future.”