U.K. antitrust regulators recently determined that JD Sports Fashion’s 2019 Footasylum acquisition poses problems for competition in sports-inspired apparel and footwear. Now, the retailer may have its hand in investing in a different kind of fashion business.
Sky News is reporting that JD Sports Fashion is among of number of parties in discussion with Missguided founder Nitin Passi, as well as the retailer’s advisors, for a controlling interest in the women’s fashion e-retailer.
JD Sports Fashion and Missguided did not immediately return Sourcing Journal’s request for comment.
The U.K.-based athleticwear retailer, which also owns U.S. footwear retailer Finish Line, has been expanding its horizons through acquisitions. In the past year alone, JD Sports has acquired two streetwear/footwear hybrids: Shoe Palace for $325 million and DLTR, for $495 million.
The company then acquired a 60 percent stake in Polish retailer Marketing Investment Group S.A., which operates European footwear sellers Sizeer and 50 Style, and took a controlling interest in youth-centric, U.K.-based Oi Polloi in May. Most recently, JD Sports Fashion acquired an 80 percent stake in Spain’s Deporvillage, a specialty retailer that sells sports equipment primarily for cycling, running and outdoors.
But Missguided which be a much different step for JD Sports, away from the footwear and athleticwear realm it is used to. The digital native sells trend-influenced fashion apparel and accessories including dresses, coats, jackets, blouses, jeans and boots. JD Sports sought to get in on similar apparel businesses before, entering talks with both Debenhams and Arcadia Group when they went under. Neither of those negations resulted in a sale, with Arcadia’s Topshop going to Asos and Boohoo scooping up Debenhams.
Missguided, which is reportedly being advised by bankers at Rothschild, is also understood to be talking to a small number of other prospective investors, the report said. According to Sky News, the talks between the online retailer and its suitors were not near a conclusion.
The fast fashion retailer first sought to sell a stake in April, with Passi stating that he wanted to grow the business more aggressively. Prior to that, Passi said he had never raised outside money for Missguided.
At the time, Missguided only expected to sell a minority stake and perhaps raise up to 100 million pounds ($138.5 million), but Passi noted that the fundraising could be a stepping stone to either a bigger stake sale or an initial public offering (IPO).
That month, Passi said the company, which once sold a bikini for just 1 pound ($1.38), expected total sales to approach 400 million pounds ($553 million) for the full year. The retailer was profitable when costs arising from the pandemic were excluded, benefitting from the shift to online spending that not only lifted rivals like Boohoo and Asos, but did a number on the U.K.’s high street, which was filled with bankruptcies across traditional fashion retailers.
Strong pandemic sales delivered a major turnaround for Missguided, which encountered its own challenges in the years before the Covid. The women’s fashion retailer first attempted to move into physical retail with a handful of its own standalone stores, but had to close them in 2019 after the company incurred heavy losses.
Missguided, which also operates a men’s wear brand, Mennace, revealed last month that it was partnering to sell clothes in 100 of Asda’s stores. However, this isn’t the e-tailer’s first dalliance with brick-and-mortar. Missguided launched its first homeware and beauty collections in 2021, bringing the latter into U.K. beauty retailer Superdrug’s stores in March.
In 2020, Missguided signed the Transparency Pledge, listing its Tier 1 manufacturing facilities on its website. The signing came after U.K. lawmakers questioned the retailer and 15 others in the country on their attempts to reduce the environmental and social impacts of the apparel they sell, amid waste concerns fast fashion brings. The company came under scrutiny after a supplier was found to be paying workers less than minimum wage in its Leicester warehouses.
JD Sports has also found itself in the hot seat. CEO and executive chairman Peter Cowgill was paid $7.1 million in bonuses in 2020, even as the sports-inspired fashion retailer received a reported $141.7 million in government support. Cowgill had to dispel rumors that he was stepping aside as CEO in the wake of the revelation.