Suppliers, ex-staff mull legal action after Missguided failure

By

Sandra Halliday

Published
Jun 3, 2022

Missguided — and its menswear brand Mennace — may have a much more certain future now that it's been bought by Frasers but the company’s collapse into administration has left many people unhappy and considering taking action against the previous owners. They include suppliers who were owed money by the firm, staff who were sacked by the administrator in a brief phone call and even customers who are struggling to get refunds they'd applied for.

The Guardian reported that suppliers have “filed an official complaint to the Insolvency Service and are considering legal action” over what some claimed to be “a reckless approach” by the former private equity owners.

It had been part-owned by turnaround specialist Alteri until it called in administrators from advisory firm Teneo last Monday.  The owners had spent some months trying to sell the company after what the recovery driven by consumers turning to online retailers during the pandemic went into reverse when shops reopened.

The newspaper said that more than a dozen suppliers based mainly in Leicester and Manchester are owed millions of pounds between them for orders that were still being placed at a very late stage. It also said that the company was demanding deliveries as late as the day it went into administration, which could lay it open to legal action.

The Guardian added that "hundreds of UK factory workers" have lost their jobs at factories that were completely reliant on supplying the business. Some suppliers are also at risk because of the amount they’re owed. Manchester-based Moku is one of them and is seeking legal advice.

The situation also led campaigners to repeat calls for more protection for suppliers in such a situation.

Meanwhile, some former staff are also discussing legal action due to their belief that the redundancy process was badly managed.

They claimed a conference call at short notice included an automated message and that some staff on annual leave only discovered their jobs had gone through seeing the news on social media.

As for customers, some have said, also on social media and in various news reports, that their deliveries hadn’t arrived and their refunds hadn’t been issued prior to the firm’s collapse. 

Missguided is continuing to trade under the control of the administrators for eight weeks, even though there have been reports that its warehouse shut last week. 

One customer told the BBC she only managed to get a refund through Klarna.