But Passi’s exit isn’t the only change at Missguided, which confirmed reports that it has appointed consulting firm Teneo to explore strategic alternatives for the business. The retailer initially briefed staff on a proposed restructuring in February, and began a 45-day consultation process to determine potential new directions such as finding a buyer or liquidating.
The retailer said in a statement emailed to Sourcing Journal that it is now in a position to “accelerate its plans to find a strategic partner with the infrastructure and platform to “deliver the next stage in its turnaround and maximize its potential.”
Since the start of the consultation, Missguided said it has made “significant progress in addressing stock issues, streamlining warehouse operations and reducing head office costs.”
The retailer expects to cut 63 jobs as part of the reorganization. The number is less than half the anticipated 140 roles that were initially at risk, which the company credits to measures including redeployment and a voluntary redundancy program.
Missguided reported global sales of 287 million pounds ($374.3 million) in the year prior to March 2021, with most coming from the U.K. and U.S. The company won’t report 2021 sales until June.
Teneo recently led the sale of Studio Retail Group to Mike Ashley’s Frasers Group after it had fallen into administration, ultimately preserving 1,500 jobs.
“In a little over 13 years, working alongside some of the most talented people in fashion, we’ve created a business that has had real traction,” Passi wrote on LinkedIn. “We serve almost 4 million customers in over 120 countries worldwide. We’ve been a social media pioneer, creating a loyal following of over 10 million fans worldwide, and our marketing at times has been nothing short of legendary.”
“And while the numbers are remarkable, more importantly, we’ve used the platform we’ve created to champion women, inspiring them through the fashion we provide, to be themselves and achieve whatever they want,” Passi continued.
Passi will remain on the board of the Sean John partner’s holding company to represent his family’s remaining 50 percent stake in the business.
It appeared Passi was already stepping back from the business, selling the other 50 percent equity stake to Alteri Investors in December in the wake of a report that Missguided was seeking emergency funding in October.
Alteri Investors, which is backed by American private equity giant Apollo Global Management, specializes in transforming European retail businesses. In particular, Alteri invests in retailers with annual sales between 100 million euros ($108.6 million) and 3 billion euros ($3.26 billion), with a portfolio including German baby catalog Baby Walz, women’s apparel seller CBR Fashion Group and U.K.-based bedding retailer Bensons for Beds.
Missguided had reportedly had other suitors late last year, including U.K. sports apparel giant JD Sports Fashion. But the retailer never confirmed the report, and Alteri made the investment just three months later.
While the Alteri deal was expected to help Missguided with the liquidity needed to overcome short-term supply chain challenges, as well as help it return to profitability, it appears there will be more changes in the coming months.
“Missguided has made substantial operational progress since receiving new investment at the end of 2021, placing us on a sounder footing in a very short space of time and I want to thank everyone for their hard work,” Missguided chair Ian Gray said in a statement. “That work means we’re now in a position to accelerate plans to explore strategic options for the business.”
The British fashion retail landscape has seen undergone a bit of a facelift in recent years as more agile retailers like Asos, Boohoo and Next have taken over as the top fashion go-tos. The Covid-19 pandemic heavily impacted many fashion businesses across the pond that were already struggling, and traditional titans like Debenhams, Topshop and many others succumbed to bankruptcy. One such business that recently got acquired under new ownership, men’s wear retailer TM Lewin, even plunged into administration twice since the pandemic’s start. And Gap Inc. exited its U.K. store operations in 2021 as part of a larger departure from Europe, closing all its locations across the pond.
“It won’t take me to tell you that the last year has been tough—sadly, it’s been difficult for many good fashion retailers,” Passi wrote. “But, stepping back from those short-term challenges, I have great pride in what we’ve built. Despite that pride, this is however a difficult message for me to share.”
Now, the Missguided board will be on the hunt for a new CEO to fill Passi’s shoes. In his statement, Gray also thanked Passi for building the brand from scratch.
“Missguided is one of the most vibrant brands in young women’s fashion and that’s down to more than a decade of hard work by Nitin,” Gray said. “I recognize it’s never easy for founders to decide to step away from day-to-day leadership of the businesses they create but I respect Nitin’s decision and look forward to his continued guidance as a member of the holding company board.”
Passi started the online retailer in a factory in Manchester, England in 2009 with a 50,000-pound ($65,000) loan from his father.