What happened to Missguided? Details explored as online clothing retailer is on verge of bankruptcy

Missguided was on the verge of appointing administrators after creditor JSK Fashions served the company with a winding-up petition earlier in May.

The online fashion giant is still on the verge of bankruptcy after allegedly owing suppliers millions of pounds, prompting police to be called to the company's Manchester headquarters.

Alteri Investors, which saved Missguided from bankruptcy in 2021 by purchasing a 50% stake in the company, has been shopping the business in recent weeks, with JD Sports and Shein expected to make bids.

Teneo, an insolvency firm, is preparing to take over as administrators if Alteri is unable to liquidate the business.

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Missguided's financial woes explained

The clothing company has been accused of failing to pay its suppliers and is on the verge of bankruptcy.

Police were reportedly called to the company's headquarters in Manchester in response to the supplier's allegations.

Creditors have filed for compulsory liquidation, and the case will be heard in a Manchester court in July. According to the newspaper, three suppliers have warned that they are in danger of going bankrupt due to unpaid bills.

However, one angry supplier reported that they had to sell their wife's and mother's wedding jewelry to raise £40,000 to pay staff wages. They claimed they would be penniless if Missguided went bankrupt.

As per reports, the online fashion giant confirmed:

"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 the progress of that process in the near future.”

It comes after the company made a series of layoffs in December to stay afloat. It also sold half of the company to private equity firm Alteri.

Missguided was founded in 2009 and sold its clothing on major fashion websites such as ASOS and Zalando. According to reports, it employs approximately 400 people in Manchester.

Last summer, the online fashion giant announced that it would sell clothing in 100 Asda stores across the UK.

In February, Studio Retail also appointed administrators, leaving thousands of customers waiting for their orders. Fraser Group bought them out, preventing it from going bankrupt.

However, Teneo was hired by the company last month to assess strategic options, and it is now understood that the corporate advisory firm will oversee any insolvency process.

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What precautions have been taken?

Alteri has been working to improve the company's operations since it purchased the retailer in December.

The company has reported "good operational progress in recent months." It has concentrated on addressing stock issues, streamlining warehouse operations, and lowering head office costs.

However, there have been layoffs. It was warned earlier this year that 140 jobs were at risk, but after consultations and measures such as redeployment and voluntary redundancy, that number has been reduced to just over 60.