Young fashion etailer Missguided saws its losses soar to £46m in its latest set of accounts following a series of costly investment errors.
While sales grew from £205m to £216m (a modest percentage increase compared to previous growth levels) in the year to 1 April its losses spiralled to £46m from £1.6m in the prior year as the business admitted it had “prematurely” diluted the influence of founder Nitin Passi, who stood back from the business to enable new recruits to have more control. This led to significant issues with its product selection and inventory control.
The business also said its move into bricks and mortar retail with two flagship, standalone stores had proven costly and the stores (in Bluewater and Westfield Stratford opened in 2017) had been “significantly too large” leading to a £4m write-down of store assets.
On top of this the company had spent £7m on consultants to carry out a strategic review of the business followed by a resulting £1.3m redundancy bill.
Following the tumultuous year, Misguided said 2019 would be a year of transition as it focused on clearing the poorer quality stock, continuing with its international expansion and focusing on online growth. It is hoped thereafter the business can return to its previous impressive growth trajectory.