Missguided seeks rescue plan as supply chain chaos strains finances
Missguided’s multimillionaire owner is scrambling to save the fast fashion brand from supply chain pressures.
The online retailer has been hit by a perfect storm of price rises and delivery disruption.
Missguided founder Nitin Passi is thought to be in talks with City crisis experts from AlixPartners to look at dramatic restructuring options, according to reports in the Sunday Telegraph and Sunday Times.
Sources also told the Telegraph that Passi was seeking £50m in emergency funding from outside investors.
AlixPartners is just one of a range of parties to be involved in talks with the brand and has not been formally appointed, CityAM understands.
The brand could also be sold to another budget fashion rival, with names including Asos, In The Style and Shein, touted as potential buyers.
The firm has struggled as its larger wholesale customers have been taking longer to pay, according to City sources.
Its suppliers have asked for earlier payments to help them cope with shipping delays, further exacerbating the strain on the firm’s finances.
Despite hiring Rothschild to sell the firm, Missguided owners have struggled to sell the business or find a new backer. Talks with JD Sports appear to have cooled.
A spokesperson for Missguided said Rothschild continued to manage the firm’s investment process.
“While we continue to talk to a range of parties as part of that process, this kind of incorrect speculation is more than disappointing and disrespectful to our partners and staff,” the spokesperson said of Sunday’s reports.
Missguided is not the only clothing business to struggle in recent weeks.
Fashion and homeware retailer Matalan has hired debt restructuring =experts from Deloitte as it looks to refinance next year, according to The Sunday Times.
The high street staple has racked up to almost £500m in debt, with £348.7m maturing in 2023.
Fast fashion has been under the spotlight in recent years after various scandals have revealed exploitation of garment workers in the UK and overseas.
Missguided was identified as one of the brands to frequently use so-called ‘dark patterns’, on its website.
Research from Rogue Media found Gen-Z orientated brands are increasingly using tactics such as countdown timers, exclusive subscriber discounts and trending stickers, to entice users to make purchases.