Missguided chief looks at radical restructuring options - report
Missguided founder Nitin Passi is seeking an urgent lifeline to keep the business afloat in the face of the global supply chain crisis.
That’s according to weekend press reports that said the 11-year-old business has taken on AlixPartners to look at a radical restructuring of the company.
The Telegraph said Passi is seeking an “emergency” £50 million cash injection from outside investors as logistics issues squeeze its supply chain and send its costs higher.
We heard last week from Unilever how higher costs are becoming an issue, but the global consumer products group has massive pricing power through its line-up of global brands. A business like Missguided is in a much less powerful position given the intense competition in the fast fashion sector and that low prices are one of the key selling points of the kind of goods it produces.
The report also also said that major wholesale customers are taking longer to pay, adding to the pressure on the company’s finances.
And it suggested that a sale of the business is still on the agenda with companies including ASOS, Zalando, Shein and recently-stock-exchange-listed In The Style touted as potential buyers.
The company has been seeking to sell itself or find new investors for much of this year and earlier reports had linked JD Sports with a possible deal. Talks with the acquisitive retail giant are said to have stalled but could still be revived.
It’s unclear how much time the company has to reach a solution to its problems.
Missuided was set up just over a decade ago with a £50,000 loan from Passi’s father, a loan that was quickly repaid as the business boomed on the back of social media exposure and celebrity fans such as Nicole Scherzinger and Sofia Richie wearing it. The label was at the forefront of the North of England fashion explosion based in and around Manchester.
However, it also more recently (in 2017) was the subject of accusations over supply chain abuses. And its expansion into physical stores backfired with flagship properties at Westfield Stratford City and Bluewater later closing.
The company, which has around 400 staff, has seen flat sales for a number of years and was last profitable in 2016. Even the pandemic that was a boost to many online fashion retailers didn’t seem to help.
The company hasn’t commented so far.
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