Frasers Group, controlled by the Sports Direct founder, Mike Ashley, has bought the online fashion retailer Missguided out of administration for £20m in cash.
Frasers, which owns the Sports Direct, House of Fraser and Flannels retail chains, announced it had acquired certain intellectual property of Missguided Ltd and related firms Mennace Ltd and Missguided (IP) Ltd, in a purchase funded from working capital.
After the deal is completed, Missguided will continue to be operated by the administrator under a transitional agreement for about eight weeks before it becomes a standalone business within the Frasers Group.
Michael Murray, the chief executive of Frasers Group, said the company was “delighted to secure a long-term future for Missguided”, adding that it would “benefit from the strength and scale of Frasers Group’s platform and our operational excellence”.
He said: “Missguided’s digital-first approach to the latest trends in women’s fashion will bring additional expertise to the wider Frasers Group.”
Missguided collapsed into administration on Monday after the company was issued with a winding-up petition by clothing suppliers who are owed millions of pounds, putting about 140 jobs at risk.
It is not yet clear how many jobs will be saved by the Frasers purchase. One source told the Guardian this week that about 80 roles had been made redundant immediately after the company went into administration.
Administrators from Teneo had failed to secure a last-minute rescue bid for Missguided, which made headlines with its £1 bikini three years ago, selling them at a loss as a marketing stunt.
The fast fashion company, founded in 2009 by Nitin Passi, got into financial difficulties last autumn. It was saved from collapse when the private equity firm Alteri stepped in, buying a controlling stake and taking seats on the board. Passi subsequently left the company.
In recent months some of Missguided’s fashion suppliers in the UK and overseas were understood to have not been paid.
The Guardian understands that more than a dozen UK suppliers report they are collectively owed millions of pounds for orders, some of which were placed as late as last month.
There had been some speculation that the larger online fashion rival Boohoo would step in to buy Missguided as part of a pre-pack administration deal. However, the talks were ultimately unsuccessful.
Missguided was among a small group of internet fashion businesses that grew in popularity at a time when the traditional high street and established retailers struggled. It initially enjoyed rapid growth in its UK home market, raising its profile through sponsorship of the reality TV show Love Island, before expanding into the US, Australia, France and Germany.
The company’s mostly female workforce at its Manchester headquarters and the tough negotiations with suppliers were highlighted in a documentary broadcast on Channel 4 in 2020.
Missguided is just the latest brand that Ashley has put into his basket as part of a retail shopping spree, snapping up struggling brands including Evans Cycles, Jack Wills and the online specialist Studio Retail.
The acquisition of Missguided is a “punt worth taking” for Frasers Group, according to Darcey Jupp, an apparel analyst at GlobalData. “Operating Missguided as a standalone brand is a wise move, as its young target audience would not be inclined to shop at its other fascias like House of Fraser,” she said.
Jupp said Frasers would need to make sure Missguided’s clothing was “trend-led and competitively priced”, adding: “With inflation spiralling in the UK, there is an opportunity for Missguided to capture young consumers who are keen to continue purchasing apparel but must trade down.”