Frasers Group buys Missguided out of administration

The group, which also owns House of Fraser and Flannels, has acquired Missguided Ltd and related firms Menace Ltd and Missguided (IP) in a purchase funded from working capital.

Following completion, the business will be operated by its administrator Teneo under a transitional agreement for a period of approximately eight weeks. It’s then the intention that Missguided will operate as a standalone business within FG. 

It comes just days after the online fashion retailer called in administrators from Teneo to sell its business and assets. Teneo said Missguided had been hit by supply chain costs and rising inflation confidence in an increasingly tough market. 

Rival brand Boohoo had been in talks to buy the business in a pre-pack administration deal, with Asos and JD Sports also reported to have been interested.

Missguided was founded in 2009 by its then chief executive Nitin Passi, becoming one of the market’s biggest players. However, it had struggled to make a profit over the past few years and struggled to turn a profit - with private equity investor Alteri Investors purchasing a 50% stake in the company in December last year. 

Passi stepped down in April with Teneo appointed to explore strategic options, with Alteri Investors searching for ways to sell the business in the past few weeks. 

Commenting on the buyout of the business, Frasers Group boss Michael Murray said: "We are delighted to secure a long-term future for Missguided, which will benefit from the strength and scale of FG’s platform and our operational excellence.

“Missguided’s digital-first approach to the latest trends in women’s fashion will bring additional expertise to the wider Frasers Group.” 

According to The Guardian, more than a dozen UK suppliers report they’re still collectively owed millions of pounds for orders from Missguided, some of which were placed as late as last month.

Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, told the outlet that the £20m purchase for Missguided was “small beer” compared with the money poured in to keep the company afloat. 

She explained: “Being part of the larger Frasers empire should give the brand more backbone in terms of digital sales and help it survive the inflation storm which hastened the retailer’s downfall.”