A business advisory expert has outlined what options are available to Missguided as it was revealed the online fashion giant is on the brink of collapse.
Brian Burke, managing director at Quantuma, has spoken exclusively to BusinessLive on what the Manchester-headquartered company may do now, its next steps if it does enter insolvency and what actions its creditors could take.
The uncertainty surround Missguided's future comes a month after the business cut 63 jobs and its founder quit as chief executive.
Mr Burke said: "Missguided’s advisers have been seeking a buyer for the business since April and the situation has now escalated following creditors issuing a winding up petition to recover their debts from the company.
"It is unclear at what stage the sale process has reached. However, with the threat of winding up and if agreement cannot be reached with those creditors, it is likely that the directors or charge holders would look to appoint administrators before the winding up petition is heard.
"The appointment of administrators would provide the company with protection from its creditors whilst the administrators continue to seek a buyer for the business and assets, or to allow a sale to be concluded shortly following their appointment.
"The alternative is looking to exit administration by way of a company voluntary arrangement (CVA) or restructuring plan, which will require creditor approval, and likely significant compromises of the debt owed to its suppliers, to preserve the business.
"Creditors should look for payment in advance of any further goods being supplied, check or obtain advice on their terms of trade to see what options these provide to them, such as retention of title to goods, and establish the steps they need to take in order for these goods to be recovered."
