A misguided collapse could leave thousands of customers out of pocket | fashion industry
Thousands of Missguided customers could be left out as administrators are not expected to pay refunds that were requested before they were called on Monday and order deliveries are not guaranteed.
The online fashion retailer’s website was phased out on Wednesday, including access to customer services, after a £20million deal to acquire the brand was agreed with the owner of Sports Direct, Frasers Group.
The Guardian understands that the directors of consultancy firm Teneo, who are to operate Missguided for the next few weeks as part of the Frasers deal, are unable to pay the reimbursements demanded before their appointment on Monday. Deliveries of goods already ordered are also not guaranteed as part of negotiations with GXO, the operator of Missguided’s warehouse in Trafford Park, Manchester.
Many shoppers have complained on social media about not being able to get information about their orders.
A customer who said he was expecting a refund for three items questioned why the website continued to operate on Monday and Tuesday. “Why are they still selling stuff when they’re not even honoring refunds and open orders.”
Another said they were told there was a “computer glitch” in Missguided’s warehouse so refunds could not be processed.
Another customer added on Wednesday: ‘I was assured that my two parcels would be delivered yesterday, still nothing.
Frasers bought the brand and other assets for £20 million. The initial deal is not expected to include Missguided’s stock and warehouse operations, but will save the jobs of nearly 150 head office employees.
Frasers is expected to integrate the brand into its own warehouse operations, which are run from Shirebrook in Derbyshire.
A Missguided warehouse worker said workers had already started consulting about potential layoffs.
“We face changes every day now, and we don’t know what will happen the next day,” he said.
A number of former head office employees are considering legal action against the company over allegations that the dismissal process was not properly handled. Law firm Aticus Law said more than 65 former workers had contacted for help and advice.
Nearly 90 head office workers were told they were being laid off via conference call with just 25 minutes’ notice on Monday, with many workers finding out they had lost their jobs via social media.
Suppliers to the collapsed fast fashion brand have filed a formal complaint with the insolvency service and are considering legal action over what campaigners say was a ‘reckless approach’ by the company’s private equity owners. ‘company.
Campaigners said they believe suppliers could be liable for at least £15million. A Manchester-based supplier said it owed more than £700,000 from orders delivered and work in progress. “We were assured there was money in the bank to pay the suppliers,” he said.
Simon Fagan, Head of Litigation at Aticus Law, said: “It is clear from both the instructors and the evidence received that, despite what appears to be a well-known financial problem with Missguided, various parts of Missguided have continued to spend some orders. , making misleading or false comments about impending payments and maintaining that there was no cause for concern.
“Such representations could be actionable.”
Missguided collapsed in administration after failing to secure a bailout deal despite interest from biggest rivals Boohoo and Asos. The company made headlines with its £1 bikini three years ago, selling it at a loss as a marketing stunt, and gained notoriety despite its relatively small size by sponsoring the reality show Love Island.
The fast fashion company, founded in 2009 by Nitin Passi, ran into financial difficulties last fall. It was saved from collapse in December last year when private equity firm Alteri stepped in, buying a majority stake and taking a seat on the board. Passi left the company in April.
GXO did not respond to a request for comment. Teneo declined to comment.