Retail tycoon Mike Ashley has added fast fashion brand Missguided to his empire after snapping up the firm in a £20m ($25.2m) rescue cash deal.
It comes after the company collapsed into administration late on Monday after suppliers accused the business of millions of pounds worth of outstanding payments.
Missguided was issued with a winding-up petition from its creditors, which is the strongest legal action a supplier can take against a business. It is often the natural next step in the debt chasing process after a statutory demand for payment has gone unheeded.
Insolvency specialists at Teneo had been appointed to find a buyer for the firm, which employs around 330 staff from its Manchester headquarters.
On Wednesday Frasers Group (FRAS.L), which also owns Sports Direct and House of Fraser, confirmed it had bought the intellectual property of the retailer, and sister brand Mennace.
It said that Missguided will continue to be operated by administrators for a transition period of around eight weeks, but that it would be run as a “standalone” brand within the wider group.
Remaining assets could still be sold separately as part of the administration.
Fraser's Group shares were around 1.8% higher on the day in London.
“We are delighted to secure a long-term future for Missguided, which will benefit from the strength and scale of Frasers Group’s platform and our operational excellence,” Michael Murray, chief executive of Frasers Group, said.
“Missguided’s digital-first approach to the latest trends in women’s fashion will bring additional expertise to the wider Frasers Group.”
Missguided joins the Frasers retail umbrella alongside the likes of Evans Cycles, Jack Wills, Sofa.com, and Game, which were acquired in similar deals.
Online rival Boohoo (BOO.L), which owns PrettyLittleThing, NastyGal and MissPap, had been in discussions to buy Missguided in a pre-pack administration deal, while Asos (ASC.L) and JD Sports (JD.L) were also reported to have been interested in the firm.
Missguided was founded in 2009 by Nitin Passi and grew rapidly thanks to demand for online fashion.
During the pandemic the company also saw rapid growth but has since struggled now that physical stores have reopened and spending has been hit by the sharp cost of living crisis.
The company has also been hit hard by surging supply costs, wider inflationary pressures and softening consumer confidence in an increasingly tough market.
At the end of last year, the fashion house was involved in a takeover by investment firm Alteri, which announced a string of staff redundancies in December as part of a turnaround plan.
“Frasers Group has fished Missguided out of the fashion bargain bin and added it to the rack of labels in its substantial wardrobe.The £20m it is paying to acquire Missguided’s intellectual property is small beer, when you consider the many millions of pounds poured in during vain attempts to save it from collapse,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.
“Alteri investors injected £53m into the business and took a 50% stake in the company but attempts to sell floundered, and now Frasers Group has scooped up the remnants ready for a makeover.
“Being part of the larger Frasers empire should give the brand more backbone in terms of digital sales and help it survive the inflation storm which hastened the retailer’s downfall.”