Misguided shoppers left out of pocket after the fashion brand’s failure will not get their money back, say the administrators winding up the company.
Teneo, which will run the business until it is acquired by new ownership Fraser Group, said the company will not be able to issue refunds to customers.
That means shoppers like Steph Eady, who returned £190 worth of clothes, will have to use their credit card to make their claim.
When a company goes bust, customers are often last on the payback list.
“I was looking for a dress for a friend’s wedding, so naturally I ordered a lot of options to try on,” Mrs. Eady said.
She returned seven items but did not get her money back.
“I messaged Missguided on Twitter and they told me it had been delayed due to a technical issue but I would get it.
“Now I’ve received an email that basically says you’re not going to get your refund,” she said.
Manchester-based Missguided and its menswear brand Mennace went under in May after their suppliers filed for closure over unpaid debts.
Pandemic lockdowns initially sent internet shopping sales skyrocketing, giving a boost to brands like Missguided that do most of their business online. However, rising prices have prompted buyers to cut back and costs, particularly for transportation, have put additional pressure on businesses.
Competition for Missguided’s 18- to 34-year-old target customers is fierce, with competitors such as Boohoo, PrettyLittleThing and Shein dominating the market.
Two days after their collapse, Missguided and Mennace were bought for £20million by the Frasers Group, which owns Sports Direct and House of Fraser. The new owner is expected to take over Teneo in August. In the meantime, the site has stopped taking orders and customers are chasing orders, returns, and refunds.
- Misguided shoppers chased orders and refunds
- Sports Direct owner buys Missguided after collapse
- A misguided fast fashion brand collapses
“When you hear they’ve found a buyer you think it’ll be business as usual and you won’t have any trouble getting your money back – but that’s not the case,” Ms Eady said.
Other customers received the same email as Teneo’s Ms Eady, which said the “best option” was to make a claim through her credit card or “buy now, pay later” provider.
It said: “Since the companies are insolvent, there is a possibility that the creditors will not be repaid by the administrations at all”.
Although Teneo declined to comment directly to the BBC, the email said that Missguided and Mennace have debts that “far exceed the value of their assets”. Teneo also declined to say how many customers are likely to be affected.
- Write to the administrator who manages the collapsed company, detailing what you are entitled to and for what
- If you used a Buy It Now Pay Later system, contact your provider for a refund
- If your purchase was over £100 and you paid by credit card, file a Section 75 claim with your provider
- If you paid by debit card, request a chargeback from your bank within 120 days of payment
Source: The?
Many individual customers will end up “victims of the corporate collapse,” warned Julie Palmer, a partner at Begbies Traynor’s bankruptcy firm.
But there’s a glimmer of hope for some shoppers as they quickly try to find other ways to get back the money they’ve spent, she said.
Some shoppers who paid with debit cards have already reported successful refunds through Chargeback – a voluntary scheme that Visa, Mastercard and Amex have joined.
Buy-now pay-later brands Klarna, ClearPay and Paypal all told the BBC they would support their customers to get their money back through their disputes.
Teneo said in the email that customers who still have items they wanted to return should not return them, as refunds would not be honored. However, it said it is still working to fulfill pending orders where possible.
Teneo’s email said: “Any money left over after the assets have been sold can potentially be returned to creditors such as customers, suppliers and employees.”
However, this process could take months to complete and money owed to suppliers such as B. the companies that make clothing for Missguided would take precedence over monies owed to customers.
Even Missguided customers who have already been told they would receive a refund from the company shouldn’t expect to receive one now, Teneo said in the email. Items already returned would not be refunded, nor would orders placed before administrators arrived on May 30, it said.
While some customers may be able to reclaim money through credit cards and other payment providers, the anger and disappointment likely damaged the Missguided brand, which Fraser Group bought.
“They had a very loyal customer base,” Ms Eady said. “It felt like a community of like-minded people.” But that trust has gone, she said.
“Not only immediate customers are affected, you will tell all your friends.”
Annelie Helgelin, of digital consumer intelligence firm Brandwatch, said Missguided has been heavily criticized on social media.
Negative mentions on Twitter are up 1,451% and positive posts are down 30% since May 26, when the company was on the brink of collapse, with many “angry mentions” from customers frustrated by lack of refunds and deliveries.
“It can be challenging for a brand to win back their loyal following after an incident like this that left many customers feeling let down,” she said.
“However, we don’t see a significant number of talks of a boycott that indicate these consumers may return once the brand resolves its issues.”
On Tuesday, Frasers CEO Michael Murray announced that Missguided founder Nitin Passi would join the group as Missguided’s chief executive. He had resigned from the same function in April.
Mr Passi said: “I am very aware of the impact the administration of Missguided has had on our stakeholders and I am committed to restoring their confidence.”
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