Missguided fashion retailer on verge of collapse

Fast fashion retailer Missguided is on the brink of collapse after being issued with a winding-up petition by creditors.

It is understood the business, which has about 330 staff, could call in administrators as early as Monday.

Missguided was rescued last autumn by the finance firm Alteri Investors.

It has suffered from supply chain problems, rising freight costs and increasing competition from rivals like Boohoo and Chinese firm Shein.

In recent weeks Alteri has been trying to secure a sale of the fast-fashion business.

Insolvency specialists Teneo are advising Alteri on strategic options for the business and it is understood they are ready to step in as administrators if a solvent solution cannot be found.

Any buyer may likely try to do a deal via what is known as a pre-pack administration, which allows an insolvent firm to sell its assets to a bidder.

According to a report in the i newspaper, external, police were called to Missguided's Manchester headquarters after suppliers turned up earlier this week demanding overdue payments.

Supplier JSK Fashions issued a winding up petition on 10 May.

A creditor - in this case one of Missguided's suppliers - can apply to a court to close a company if it is unable to pay its debts. The idea is the firm's assets are sold and those who are owed money will be paid.

The i said that three suppliers for Missguided warned they are at risk of going under due to outstanding payments.

A Missguided spokesperson 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."

The business was founded by Nitin Passi in 2009 and grew to become one of the UK's biggest online fast-fashion players.

The brand later expanded into Europe, the US and Australia and now ships to more than 180 countries.

However, in the last few years the business has struggled to make a profit and in December Alteri announced redundancies as part of a turnaround plan.

Mr Passi stepped down as chief executive in April.

The firm began as a purely online retailer before adding several bricks-and mortar stores, including a flagship store in east London's Westfield shopping centre in 2016. It has since shut all its physical shops in the UK, saying they cost more to run than they brought in.