Suppliers apply for a compulsory liquidation order in court for troubled online fashion store that is teetering on the brink of collapse
By Harry Mottram: Suppliers have turned up at the headquarters of online fashion company Missguided demanding to be paid but things look bleak for them as the company teeters on the brink of collapse.
Some will go bust if Missguided goes down which is on the cards as it struggles to pay debts built up in the last couple of years. On Tuesday they demanded payment using the age old technique of turning up in reception and refusing to leave until paid. Managers at Missguided called the police and sent the staff home early as the chaotic scene played out.
Their next move has been to apply for compulsory liquidation with a petition lodged against the firm in the high court in Manchester although the hearing may not happen for weeks. Sadly, it appears to be too late with some suppliers admitting they will themselves go to the wall if they are not paid immediately.
If that wasn’t bad enough the company may well be trading while insolvent already and according to the i-newspaper the company is still taking orders and sending orders to suppliers.
The i said in a report online: “Supply chain disruption, overspending and inflation have combined to leave the company on the brink of collapse, with the boost in online sales during the pandemic failing to translate to profits because of rising costs.
“In December, the company made redundancies and tried to stay afloat by selling a 50 per cent share of the business to private equity firm Alteri, which focuses on underperforming businesses. Soon afterwards, clothing suppliers were told they would have to cut their prices by 30 per cent, even on orders they had already delivered, according to multiple sources.”
With a partnership with the TV reality shoe Love Island it was thought the company would be highly profitable but the rag trade is notoriously competitive with very slim margins. Ian Carrotte of ICSM said members of the credit intelligence group had sounded alarm bells weeks ago as rumours of non payment of invoices by Missguided began to circulate.
“I understand one supplier is owed two million pounds,” he said, “and I’ve heard of another selling personal jewellery so as to be able to pay staff. The moment a customer fails to pay on time then credit to them should stop. I know that is difficult with a large order so we always advise breaking orders into chunks so invoices are going out as a large amount of work is taking place. That way the whole order isn’t lost if the client goes into administration.”
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk