Mike Ashley’s Frasers Group has bought Missguided’s brand out of administration for £20 million in the first distressed takeover since his son-in-law took over the running of his empire.
Missguided collapsed on Monday after Boohoo failed to clinch a takeover deal of its online fast-fashion rival and administrators at Teneo were appointed.
It is understood that Boohoo, which has bought a number of brands out of administration including Debenhams and Dorothy Perkins, had still been trying to strike a deal after Missguided filed for insolvency.
Michael Murray, who was promoted to Frasers Group chief executive last month and married Ashley’s daughter shortly after, said that the company was “delighted to secure a long-term future for Missguided”.
Frasers, which used to be called Sports Direct, now owns House of Fraser, Flannels, Jack Wills, Evans Cycles, Game and Sofa.com, and has interests in Agent Provocateur as well as a stake in Hugo Boss. Most of those acquisitions have been secured during insolvency processes, while Ashley has placed bets on other businesses, such as Debenhams, Studio Retail and Goals Soccer, that have later filed for administration.
Murray, who used to run the company’s property arm before being appointed to the unusual position of head of elevation, said Missguided would “benefit from the strength and scale of Frasers Group’s platform and our operational excellence”.
He added: “Missguided’s digital-first approach to the latest trends in women’s fashion will bring additional expertise to the wider Frasers Group.”
It is unlikely that any of Missguided’s 140 staff will be transferred to Frasers, as the company will be operated by the administrator under a transitional agreement for eight weeks before it becomes a standalone business within the group.
Missguided, founded by Nitin Passi in 2009, had faced winding-up orders from factory owners over unpaid bills. Sources said that Missguided ran out of cash amid rising costs of shipping, raw materials, labour and online advertising — factors that have weighed on all e-commerce businesses in the past year.
Passi, who featured in a TV documentary a few years ago that charted the retailer’s fightback from the brink in 2018, stepped down from the business in April when Missguided said that it was looking for a new strategic investor. Alteri, a retail investor, had supported a rescue financing of the business a year ago in exchange for a 50 per cent stake; as a secured creditor it will likely recoup most of its funds.
Shares in Frasers Group rose in early trading by 9¾p, or 1.4 per cent, to 700¾p.
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Mike Ashley’s Frasers Group buys Missguided to bring digital expertise to retail group