Missguided on brink of collapse as administrators lined up
Missguided is on the brink of collapsing into administration after it was issued a winding-up petition by suppliers.
Police were called to the company’s Manchester headquarters as the online fashion giant reportedly owes creditors millions of pounds.
Suppliers are now demanding overdue payments be made, according to reports by The i, while office workers are said to have stopped answering phone calls from factory owners.
It is understood that Missguided, which rose in popularity after securing a partnership with reality TV show Love Island, is looking to call in administrators from Teneo for a potential insolvency process.
Earlier this month, a winding-up petition was issued against Missguided by clothing supplier JKS Fashions, according to court filings.
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A winding-up petition is the strongest legal action a creditor 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.
Creditors have applied for compulsory liquidation and a Manchester court is due to hear the case in July, reports have said.
As many as three suppliers have warned that they are at risk of going bankrupt due to outstanding payments.
A spokesman for the company 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.”
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.
Last month, Missguided confirmed it was looking for a potential new buyer as founder Nitin Passi stepped down as chief executive, but remained on the board of its parent company.
It also hired Teneo to assess strategic options at the time.
It is currently unclear how many jobs are at risk. Yahoo Finance UK has reached out to Missguided for comment and further information.
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Lee Barron, regional secretary of the TUC in the Midlands, said: “The TUC is working on a Joint Responsibility Initiative, in which we are in discussions with fashion brands, which includes Missguided, to stop irresponsible purchasing practices, like this, from taking place. We are hugely disappointed with the miss-management shown and the blatant disregard for workers.
“This fast and loose approach has to end, particularly in Leicester, or the reputation of the fast fashion brands will be tarnished beyond repair. It is time for a new approach which protects workers and guarantees orders will be paid for and contracts honoured, better and firm regulation, which include trade unions, is essential.”