Fashion retailer Missguided is on the cusp of a rescue deal, after a challenging pandemic period for the fast-fashion machine.
It is understood that the company has agreed terms of a deal with Alteri, the investment management firm, which will give it a cash injection and a loan, according to The Sunday Times.
The firm specialises in buying struggling retailers, and is expected to appoint directors to the retailer’s board and orchestrate the turnaround for the company.
Supply chain issues triggering high freight costs have meant Missguided’s thin margins have been significantly impacted over the past year, thereby putting them in financial difficulty.
Sources previously told the Telegraph that founder and owner Nitin Passi was seeking £50m in emergency funding from outside investors.
It come as companies like Shein, a Chinese retailer, have been started to dominate the market, chipping away at Missguided’s market share and undercutting it.
However, Missguided is not the only clothing business to struggle in recent weeks.
As City A.M. recently reported, the fashion and homeware retailer Matalan has hired debt restructuring experts from Deloitte as it looks to refinance next year. It is also poised for a rescue deal after the supply chain crisis plunged it into financial difficulty.
Additionally, Boohoo shares crashed to a five-year low after the company warned of slowing sales.
More generally, fast fashion has been under the spotlight in recent years after various scandals have revealed exploitation of garment workers in the UK and overseas.
Research from Rogue Media found Gen-Z orientated brands are increasingly using tactics such as countdown timers, exclusive subscriber discounts and trending stickers, to entice users to make purchase
Missguided was identified as one of the brands to frequently use so-called ‘dark patterns’, on its website.Â
