Infamous fast fashion brand Missguided has suffered blow after blow as of late. The UK-based retailer, advertising cheap, trending clothes primarily to young women, has already been labelled controversial — much of its target audience is beginning to reject the harmful side-effects of fast fashion and turning to more sustainable options when shopping. In the past, this has been a sore subject for the brand whose unethical practices have contributed to environmental pollution and a lack of decent salary for its workers. However, in the last month, the company has been faced with even more serious accusations including reluctance to refund customers and outright refusal to pay employees. As the pressure piles on, it likely won’t come as a surprise that Missguided is on the brink of collapse.
Missguided’s shortcomings are not just recent but rather date back years; an undercover investigation around 2016-17 alleged that factory workers in Leicester were being paid less than half of minimum wage at just £3 an hour (Ellson, 2017). Channel 4 new series Dispatches discovered that textile workers were offered little more than pennies to fashion garments for Missguided’s inventories as well as for chains such as River Island and New Look. One boss blamed the scandal on ‘direct competition with Bangladesh and China’, referring to the extremely low salary sweatshop workers in other countries are paid. Missguided has a habit of listing items for ridiculously low prices — a number of pieces on the brand’s website have previously been sold for as low as £1 — and wages must be kept low to make this possible. While many shoppers took advantage of the bargains at the time, it is now common knowledge that such extreme reductions are not possible without sacrifice. The response Missguided offered seemed hopeful, with the company claiming it took the allegations “very seriously” and subsequently signing itself up to the Ethical Trade Initiative (Benson, 2022). Unfortunately, the promise to change didn’t last long.
According to an article from The Guardian, an overwhelming number of Pakistani textile workers ‘say they have been left destitute and starving after not receiving salaries for more than four months’ (Baloch, 2022). The workers, used to living off of a salary of £100 to £160 per month, have suffered as a result of Missguided falling into administration this year; many have been recently let go and have not seen a penny come in since January. The former employees have been left unable to pay hospital bills or afford food and housing, and their futures look bleak as nobody seems willing to step in and help. Nadeem Siddique, the owner of a clothing factory in Faisalabad that would typically produce 200,000 pieces for Missguided each month, claims the brand owes him more than £2 million in unpaid invoices. Families have been unable to send their children to school for numerous reasons including not having the funds to buy books and stationery. But how exactly has the situation deteriorated to this point?
Entrepreneur turned multimillionaire Nitin Passi founded Missguided in 2009 with a small loan from his father, a wholesaler. As online shopping exploded as an industry in the early 2010s, it didn’t take long for the company to evolve into a highly-influential fashion giant, sponsoring TV shows such as Love Island in 2018 and allowing its owner Mr Passi to collect a net worth of £250 million in less than a decade (Sandercock, 2022). The owner is known to indulge in lavish purchases and owns a pink Lamborghini. However, after a series of redundancies and technical issues, Mr Passi stepped down as CEO in April 2022. In late May, it transpired that the brand owed millions of pounds to suppliers perhaps due to increasing supply costs and ‘was on the brink of collapse’. Clothing prices have skyrocketed along with many other products in the UK as the country experiences its highest inflation rates in 40 years. Advisory firm Teneo was left in charge of the administration process until global fashion and sports network Frasers Group secured the buyout for £20 million. Despite Frasers Group CEO Michael Murray’s enthusiastic remarks regarding Missguided’s future, there are already more issues on the horizon — most noticeably, the difficulties customers are facing with obtaining refunds.
This unfortunate news isn’t entirely unexpected. Customers tend to be last on the list of creditors to be offered repayment when a company goes bust. Shoppers have taken to social media to express their frustrations, especially as Nitin Passi’s rehiring as CEO of Missguided is confirmed. Administrators at Teneo have sent texts to customers explaining they “will not be able to honour any pre-appointment refunds requested and not yet settled” (PA Media, 2022). There are additional problems piling on as deliveries are delayed and Frasers Group’s deal to acquire Missguided won’t be finalised until August. In the meantime, the turbulence left in the fashion giant’s wake is not to be brushed off.
Figure 1: Missguided website error message, The Guardian.
References
Baloch, S. M. (2022). ‘Pakistani garment workers left destitute and starving after Missguided collapse’, The Guardian [online]. Available at: https://amp.theguardian.com/global-development/2022/jun/12/missguided-collapse-pakistani-garment-workers-left-destitute-and-starving (Accessed 25/06/22).
Benson, S. (2022). ‘Missguided in administration as Love Island teams with eBay – Gen Z is falling out of love with fast fashion’, iNews [online]. Available at: https://inews.co.uk/inews-lifestyle/missguided-administration-love-island-ebay-gen-z-falling-out-love-fast-fashion-1695437 (Accessed 25/06/22).
Ellson, A. (2017). ‘Workers ‘paid £3 per hour in British sweatshops’, The Times [online]. Available at: https://www.thetimes.co.uk/article/workers-paid-3-per-hour-in-british-sweatshops-8339w9rvc (Accessed 25/06/22).
PA Media (2022). ‘Missguided will not refund customers, administrators confirm’, The Guardian [online]. Available at: https://amp.theguardian.com/business/2022/jun/15/missguided-will-not-refund-customers-administrators-confirm (Accessed 25/06/22).
Sandercock, H (2022). ‘Missguided administration: why did firm collapse, who is owner Nitin Passi, how much did Frasers Group pay?’, National World [online]. Available at: https://www.nationalworld.com/business/missguided-administration-collapse-who-is-nitin-passi-frasers-group-3715403 (Accessed 25/06/22).
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