Frasers Group has bought online fashion retailer Missguided out of administration, its first acquisition under new chief executive Michael Murray.
Administrators were appointed at Missguided on Monday after efforts to secure a solvent sale of the business failed. Frasers, the owner of Sports Direct, said on Wednesday it had acquired Missguided’s intellectual property for £20mn in cash.
Murray said the brand would “benefit from the strength and scale of Frasers’ platform” and that its “digital-first approach to the latest trends in women’s fashion will bring additional expertise to the wider group”.
Missguided will continue to be operated by administrators at Teneo for eight weeks before becoming a standalone business within Frasers, which also operates the eponymous department store chain and is controlled by Mike Ashley.
The acquisition comes as Murray seeks to put his stamp on Frasers, the company started by his future father-in-law Ashley in the early 1980s. He has already appointed a new joint stockbroker and public relations advisers, brought in a sportswear industry executive to run the Sports Direct chain and agreed the sale of the group’s US sportswear interests, which were acquired by Ashley five years ago.
Boohoo, JD Sports and Chinese fast-fashion retailer Shein had also been linked with Missguided, which is based in Salford and featured in a fly-on-the-wall Channel Four documentary about fast fashion in 2019.
The transaction also marks a reversal from 2021, when the likes of Boohoo and Asos were snapping up bricks-and-mortar retailers such as Debenhams and parts of Arcadia that had fallen into insolvency.
Along with companies such as AO, Boohoo and THG, Missguided was one of the leading lights of a growing community of ecommerce businesses in north-west England.
It was founded by Nitin Passi in 2008 with a loan from his father, a clothing importer. It grew rapidly using a similar business model to Boohoo and Asos, with a rapidly changing product offering, heavy use of social media marketing and promotional stunts such as selling bikinis for £1.
In the year to March 2018, its revenues had reached £216mn, almost four times those of Boohoo-owned rival PrettyLittleThing at the time.
But an ill-judged foray into physical stores starting in 2016 stalled its momentum. It was badly affected by supply chain issues in the aftermath of the coronavirus pandemic and hit by increasing competition, especially from Shein.
In the year to March 2020, the last for which accounts are available, sales had slipped to £202mn while those at PrettyLittleThing had surged to more than £500mn.
Alteri, the Apollo-owned specialist retail investor, took a stake in Missguided in December 2021 and injected additional funds into the business. But by April it had appointed Teneo to try to find a buyer, with Passi stepping down as chief executive.