"Angry suppliers to Missguided weigh up legal action against ‘reckless’ owners", 31 May 2022

Suppliers to...Missguided have filed an official complaint to the Insolvency Service and are considering legal action over what campaigners say was “a reckless approach” by the company’s private equity owners.

Missguided called in administrators from advisory firm Teneo...after months of seeking new funds after a boom in sales of clothing online during the pandemic went into reverse when shops reopened...

More than a dozen suppliers based in the UK...say they are collectively owed millions of pounds for orders, some of which were placed as late as last month...

The company continues to trade while a buyer is sought, but customers are complaining on social media that they have not received deliveries of orders and are still awaiting refunds.

Meanwhile, hundreds of UK factory workers are understood to have lost their jobs as garment makers struggle to find new business...

One supplier said he was considering legal action as he believed Missguided could have acted fraudulently if it continued to place orders while “administration was on the horizon”. Two suppliers said they had been told by the firm that it was “business as usual” less than six weeks ago.

Nadeem Arshad, the owner of Manchester-based fashion supplier Moku, said his business was “on the brink of collapse” as it was owed almost £500,000 for recent orders and was “now seeking legal advice and joining forces with other suppliers who find themselves in this catastrophic position”.

Another said his complaint to the Insolvency Service said Missguided had “bought garments from us in the last three months even though knowing the company was in trouble and no thoughts of all the costs behind the making of our products”...

In an open letter to ministers at the business department, Labour Behind the Label said the government had failed to “take a meaningful step forward in overseeing the poor behaviour and abusive purchasing practices of brands” following its report into the Leicester garment industry in 2020. It accused Missguided of a “reckless approach” towards managing its suppliers...

Meanwhile, a number of former employees are considering legal action against the company over claims that the redundancy process was not properly managed.

One former employee said: “The entire company had a conference call with 25 minutes notice, people who weren’t there or on annual leave missed it. The call was an emotionless automated message saying that we had been made redundant and our services were no longer required.

“Many colleagues found out they had lost their jobs through social media, everyone is devastated.”

The company and its administrators declined to comment.