Nitin Passi, the multimillionaire who started Missguided with a £ 50,000 loan from his father 11 years ago, has hired city crisis experts from AlixPartners to examine drastic options for restructuring the business, have sources told the Sunday Telegraph.
Mr Passi, 38, is said to be seeking an emergency injection of £ 50million from outside investors as Missguided struggles under pressure on its supply chain, with price hikes and logistical chaos combining to threaten its future.
Another option could be to sell the business to a fast fashion rival as part of a discount offer. Sources in the city have suggested that Asos, Zalando, Chinese company Shein and Aim-cite In The Style as potential buyers.
Missguided’s large wholesale customers, including Asos and Asda, are taking longer to pay, putting significant strain on the company’s finances, City sources said.
The appointment of restructuring experts follows a 10-month attempt to sell the business or find new funders. Missguided hired Rothschild to sell earlier this year, but talks with JD Sports are said to have stalled, although they could still be boosted.
It was not known this weekend how long Mr. Passi had to find a solution. Missguided’s suppliers have demanded earlier payments as their own cash is under pressure from widespread shipping delays caused by the pandemic.
Mr Passi, a self-proclaimed fitness fanatic who owns a pink Lamborghini, claimed to have paid off his father’s loan within six months. Missguided was one of the first to capitalize on social media, with celebrity support from singer Nicole Scherzinger and model Sofia Richie key to her success with younger consumers.
However, Missguided was among a number of fast fashion retailers accused of paying staff between £ 3.50 and £ 3.50 an hour according to a Channel 4 Dispatches documentary in 2017.