Fashion retailer sees annual losses significantly widen
Manchester fashion retailer Missguided has seen losses significantly worsen after an “extremely challenging year”.
The company made a £46m pre-tax loss for the year to April 1, 2018, compared with £1.6m the previous year, in accounts filed with Companies House.
Missguided, which was founded as an online women’s fashion business by Nitin Passi, blamed “premature” investment in extra management, and the cost of running its four retail stores for the deep losses.
However, the firm, which is seen as part of a new breed of “fast-fashion” online firms that also include Manchester-based Boohoo and Pretty Little Thing, said it anticipates “returning to historic levels of profitability in the current year”.
The company’s strategic report said: “The year has been an extremely challenging one from which the brand emerges stronger.
“During the year, in order to support and enable future growth, a fresh tier of management was introduced to the business.
“We now believe that this development was premature, materially increasing the cost base and diluting the influence of our founder.”
The company said its retail store business model, situated in big shopping malls, had been “well received” by its customers.
But the revenues they generated was “insufficient to cover their operating costs, primarily due to the stores being significantly too large”.
The retailer said it had addressed the problem of its high cost base by spending £1.3m on reorganisation and redundancy costs.
“After a positive first half year, we anticipate returning to historic levels of profitability in the current year,” it added.