Missguided confirms Alteri rescue, investment firm takes 50% stake

By

Sandra Halliday

Published
Dec 20, 2021

Missguided on Monday announced that Alteri Investors, the turnaround specialist that focuses on the European retail sector, has made “a significant investment” in the firm. The price of this investment wasn’t disclosed.

The deal includes both debt and the acquisition of 50% of the group’s equity, and “will provide [it] with the liquidity and support it needs to overcome short-term supply chain challenges, as well as a platform to return the business to sustainable profitability”.

The news will come as a relief to Missguided staff and suppliers as the company has faced plenty of challenges in recent years, but the latest supply chain crisis had heaped huge pressures onto it.

It has been looking for new partners for some time and reports earlier this year suggested JD Sports was interested.

Missguided was founded in 2009 as an online-only digital retailer and fashion brand by CEO Nitin Passi. Today, it serves “over four million active, 18–30-year-old customers in over 180 countries globally”. Although its ambitious opening of flagships in key malls such as Westfield and Bluetwater proved a failure, as well as its webstore it now also has physical locations in a large number of Asda stores.

In the year to March 2021 it achieved sales of £287 million, with the UK and US being its two largest markets. But profitability has been a problem of late.

London-based Alteri is backed by US private equity giant Apollo.

Now, with Alteri’s support, the retailer said it will “be able to drive improvement in Missguided’s performance. After addressing short-term priorities including restocking following recent supply chain challenges, Alteri Investors will work with management to develop the strategy to transform the group’s profitability. In the medium term, the focus will shift to initiatives aimed at delivering sustainable growth”.

The agreement will come with the addition of an executive chairman “with strong retail and turnaround experience, and discussions with a favoured candidate are well progressed”, we’re told. The board will be further reinforced with the addition of two directors from Alteri.

Nitin Passi said: “Earlier this year we launched a process to identify a partner to help us navigate short-term challenges but more importantly deliver on the great opportunity that exists for this brand. Alteri’s deep sector expertise, proven track record and focus on driving operational efficiency make it the right partner. We look forward to working closely with the Alteri team as we return Missguided to profitability.”

And Alteri Investors founder and CEO Gavin George added: “Missguided is a much-loved brand with an entrepreneurial spirit, which has seen it stay exciting and relevant over more than a decade and build a meaningful share of competitive markets in the UK, the US and beyond. Alteri’s success in this process is testament to the breadth of our operational transformation capabilities and our retail sector expertise. 

“As a digital pureplay retailer, Missguided is exposed to core markets enjoying strong double-digit growth, and the brand is very well-placed to capture the opportunity that these positive market dynamics present. We are looking forward to working with Nitin and the management team to help the business achieve its considerable potential.”