“Everything we touched turned to gold,” Nitin Passi, the founder of Missguided, once said about his booming fast-fashion brand. Infamous for selling a bikini that cost only £1, the online clothing site boasted the latest trends at the cheapest prices. The company, set up by the entrepreneur in 2009 when he was 26, experienced a spectacular rise to success, making him a multi-millionaire in a matter of years. But, as of last week, its decline was just as fast as its ascent — and its fashion.
Missguided — which described its aesthetic as “Kardashianesque” — called in administrators last Monday as furious suppliers claimed they were out of pocket by millions of pounds and on the brink of going under as well. Potential buyers like Asos and rival Boohoo were rumoured, but on Wednesday it was announced that Mike Ashley’s Frasers Group, formerly Sports Direct, has acquired it for £20 million. The controversial businessman, who once owned Newcastle United, also rescued House of Fraser from administration but has been criticised in the past for poor working conditions in his warehouses.
Despite the purchase, Missguided’s dramatic decline has called the future of fast fashion into question with many retail experts saying young consumers have turned their back on cheap, throw-away fashion. Aptly, this year’s Love Island contestants will be dressed in second-hand clothes from eBay instead of its former fast-fashion sponsors, Missguided and I Saw It First, with the show’s bosses saying they want it to be “a more eco-friendly production”.
When he set up the business, Passi claimed he “didn’t have a clue about anything online” and yet within six months it was turning over £100,000 and in 2020, his net worth was estimated to be £200 million. Missguided’s mission was “to empower females globally to be confident in themselves and be who they want to be”, and Passi quickly signed up major celebs such as Nicole Scherzinger to be the face of the brand. It sponsored Love Island for five years and has nearly 10 million followers on Instagram.
So it may come as a surprise that such a major player should collapse. But with rising inflation and the current cost of living crisis, it seems shoppers are tightening the purse strings when it comes to non-essential items. “The cost-of-living squeeze is starting to make a difference to younger shoppers, meaning they are going out less and spending less on clothing,” Catherine Shuttleworth, chief executive of Get Savvy marketing agency, says. “They aren’t engaging with fast fashion in the way they used to.”
It seems trouble has been brewing at Missguided for some time. Some of its suppliers claimed they hadn’t been paid for months and back in December were asked for a 30 per cent discount on orders that had already been agreed. One factory owner in Leicester said he was owed more than £2 million from the company and that he had to send his 90 staff members home as he couldn’t afford their wages. Another said he had been forced to sell his wife’s and mother’s jewellery to pay his staff. It is also claimed 80 Missguided staff were immediately made redundant after administrators were called in.
There have been previous scandals around Missguided suppliers. In 2017 an undercover investigation revealed one of its Leicester-based factories was paying its staff below the minimum wage, in poor working conditions. By 2020 little had changed in the industry when Priti Patel asked the National Crime Agency to investigate conditions at one of Boohoo’s suppliers, also in Leicester, when it was claimed it was paying workers £3.50 an hour.
The Home Secretary called the allegations “truly appalling” and vowed to clamp down on modern slavery in Britain. In 2018 Missguided was also forced to make a round of redundancies after making significant losses and last year made more when investment firm Alteri took over 50 per cent of the company and began funnelling cash into it to try to revive it. It was said to have got into difficulty after rising supply chain costs, delivery issues and competition. Missguided did not respond to requests for comment.
So, was this always coming? Georgia Gadsby, co-founder and head of PR at Unearth PR, thinks so. “It’s no secret that Missguided have been accused of underpaying workers for years, alongside their fast fashion processes being increasingly frowned upon owing to its environmental impact,” she says. “Instead of reacting effectively to this change of consumer interest, Missguided continued with highly ineffective influencer marketing programmes and campaigns that no longer interested their audience, whilst continuing to make their clothing less and less affordable, making their money-conscious customers less interested in their products and brand.”
Fashion uses 1.5 trillion tonnes of water annually and is the second largest polluter after flying
Fashion certainly has a vast environmental footprint. Ninety-two million tonnes of waste are produced a year as a result of the industry — with UK consumers buying more garments than anywhere else in Europe. It uses 1.5 trillion tonnes of water annually and is the second largest polluter after flying, producing more than 1.7 billion tons of global carbon dioxide emissions every year. Retail experts think shoppers are increasingly conscious of this.
“I think fast-fashion was largely targeted at the younger generations but Gen Z are real trailblazers when it comes to buying second-hand and upcycling,” says founder of fashion rental app By Rotation, Eshita-Kabra Davies. She says By Rotation has seen an uplift in downloads and rentals are up by 200 per cent month on month.
However, cynics say perhaps the downfall of Missguided was as simple as its competitors being better. “It’s always tempting to see every brand that goes into administration as a triumphant death knell for fast fashion,” says Lauren Bravo, author of How to Break Up with Fast Fashion. “But sadly, I think the truth is a bit more complicated. While Missguided might be flailing, we’ve seen other ultra-fast fashion brands like Shein go from strength to strength — and of course that’s the thing with ultra-fast fashion: it’s taught us to be fickle and impatient, so it makes sense that shoppers switch allegiances regularly as newer, faster and trendier brands rise up to compete.”
For his part, Michael Murray, the chief executive of Frasers Group, is confident in the future of its new acquisition. He 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”.
But fashion consultant Aja Barber hopes to see the end of the UK’s love affair with cheap clothes. “I think the entire fast fashion pyramid is an unsustainable one. I won’t be crying for Missguided.”