Former Missguided employees claim they found out they were being made redundant via an ’emotionless’ automated voice message amid reports they are taking legal action against the company. Some 330 jobs were put at risk after the Greater Manchester-based fast fashion retailer went into administration last monthfollowing claims the firm owed millions of pounds to suppliers.
Staff have now claimed they were given less than half an hour’s notice to join a conference call about their fate, with colleagues who were on holiday reportedly finding out via social media. The retailer, whose headquarters is based in Trafford Parkappointed Teneo Financial Advisory to sell its business and assets after supply chain costs, rising inflation and ‘softening’ consumer confidence were said to be the leading causes behind the company’s collapse.
The online retailer has since been bought out of administration by Mike Ashley’s Frasers Group, which confirmed it had purchased the intellectual property of Missguided. According to Manchester-based solicitors Aticus Law some employees are now set to launch legal action over claims they were not properly consulted over the redundancy process.
Speaking on the shock collapse, a former employee now looking to pursue legal action said: “Over the last three or four weeks there has been no communication from the company.
“The entire company had a conference call with 25 minutes notice, people who weren’t there or on annual leave missed it. The call was an emotionally automated message saying that we had been made redundant and our services were no longer required. Many colleagues found out they had lost their jobs through social media, everyone is devastated.”
Aticus Law say they are now looking into these claims, with a view to pursuing legal action over how the redundancy process was managed. It comes after Missguided was issued a winding-up petition last month by suppliers who are claimed to be owed millions. Police were previously called to the retailer’s headquarters after suppliers turned up demanding overdue payments be made.
The company was founded in 2009 by Nitin Passi and grew rapidly amid rising demand for online fashion. But Missguided was hit hard by surging supply costs, wider inflationary pressures and waning consumer confidence in the increasingly competitive market.
Boohoo had been in talks to buy the business in a pre-pack administration deal, while Asos and JD Sports were also reported to have been interested. Last autumn, Missguided was saved in a takeover by investment firm Alteri, which announced redundancies in December as part of a turnaround plan.
Last month the retailer confirmed it was looking for a potential new buyer as founder Mr Passi stepped down as chief executive amid continued financial pressure. In March, BusinessLive reported that Missguided had launched a 45-day consultation which put 140 jobs at risk.
Last week, Frasers Group, which also owns Sports Direct and House of Fraser, confirmed it has bought the intellectual property of the retailer and sister brand Mennace for around £20m. It confirmed Missguided will continue to be operated by administrators for a transition period of around eight weeks.
Frasers said it then intends to continue to run Missguided as a ‘standalone’ brand within its group.
Michael Murray, chief executive of Frasers Group, said: “We are delighted to secure a long-term future for Missguided, which will benefit from the strength and scale of Frasers Group’s platform and our operational excellence. Missguided’s digital-first approach to the latest trends in women’s fashion will bring additional expertise to the wider Frasers Group.”
Administrators Teneo were approached by the Manchester for comment about reports of possible legal action, but declined to comment.