Missguided suppliers to be paid less than 2% of £30m owed

Fast fashion firm Missguided are expected to pay less than 2% of the £30 million owed to its suppliers, according to the Guardian.

Following its collapse in May, the group will pay out less than 1.7p in the pound to factory owners supplying its main brand after struggling with long-term debts of more than £80 million.

An administrators’ report sent to creditors revealed that unsecured creditors are also owed £46 million in total, which includes money owed to suppliers, HMRC and employees.

Administrators at the advisory firm Teneo said they were considering legal action to pursue repayment of a £569,000 loan made to Rajib Passi, the father of founder Nitin Passi. However, he is not expected to be repaid any of the £24.7 million he loaned the group to support it in recent years.

Nitin, who returned as CEO of Missguided following its acquisition by Frasers Group, has agreed to repay a loan of £333,000 he took from the company.

Missguided’s private equity backer Alteri will receive at least £18 million of the £58 million it put into the online retailer, after the sale of its intellectual property to Mike Ashley’s Frasers Group for £20 million in June.

The tax authorities will also receive £530,000 in respect of VAT, employers’ national insurance and other payments.

Last month, suppliers to Missguided filed an official complaint to the Insolvency Service over what campaigners say was "a reckless approach" by the company’s private equity owners.

Several Leicester factories were entirely reliant on business from Missguided and are struggling to survive while hundreds of UK factory workers are understood to have lost their jobs.