Online fashion retailer Missguided has collapsed into administration after failing to secure a last-minute buyer.
The company, which rose in popularity after securing a partnership with reality TV show Love Island, called in administrators from Teneo Financial Advisory after it was issued with a winding-up petition from its suppliers.
Last week police were called to the firm’s Manchester headquarters as the online retailer owes creditors millions of pounds.
Three of Missguided's suppliers warned they were at risk of going bust due to outstanding payments, according to a report in the i newspaper.
A winding-up petition is the strongest legal action a creditor can take against a business. It is often the natural next step in the debt chasing process after a statutory demand for payment has gone unheeded.
Insolvency specialists Teneo are now seeking to sell the business and assets of the retailer, which employs around 330 staff. Missguided will still continue to trade while they seek to sell off assets.
More than 80 people have been immediately made redundant, according to the Guardian, which cited a source familiar with the matter,
“As we continue to see, the retail trading environment in the UK remains extremely challenging,” Gavin Maher of Teneo, said.
“The joint administrators will now seek to conclude a sale of the business and assets, for which there continues to be a high level of interest from a number of strategic buyers. We thank all employees and other key stakeholders for their support at this difficult time.”
Watch: Missguided sells trendy clothing and aims to empower women all over the world
Online rival Boohoo (BOO.L), which owns PrettyLittleThing, NastyGal and MissPap, had been in discussions to buy Missguided in a pre-pack administration deal, while Asos (ASC.L) and JD Sports (JD.L) were also reported to have been interested in the firm.
Missguided was founded in 2009 by Nitin Passi and grew rapidly thanks to demand for online fashion.
During the pandemic the company also saw rapid growth but has since struggled now that physical stores have reopened and spending has been hit by the sharp cost of living crisis.
The company has also been hit hard by surging supply costs, wider inflationary pressures and softening consumer confidence in an increasingly tough market.
At the end of last year, the fashion house was involved in a takeover by investment firm Alteri, which announced a string of staff redundancies in December as part of a turnaround plan.
Last month, Missguided confirmed it was looking for a potential new buyer as founder Nitin Passi stepped down as chief executive, but remained on the board of its parent company.
Alex Jay, partner and head of insolvency and asset recovery at law firm Stewarts, said: “Retail has been under pressure for some time, but the problems have been masked by COVID support measures. The withdrawing of these measures and timing of retail collapses is no co-incidence.
"The Missguided collapse also has potential to create a ripple effect, given reports of suppliers owed sums in excess of £2m, which may now be irrecoverable no doubt causing major issues further own the supply chain.”