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MANCHESTER – Fast fashion retailer Missguided is on the verge of collapse after being issued with a winding-up petition by creditors. Boohoo is said to be preparing a pre-pack deal to rescue the company.

Missguided, which has around 330 staff, was rescued last autumn by the finance firm Alteri Investors.

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The company has suffered serious supply chain problems, logistics issues and growing competition, particularly from Chinese firm Shein, which is undercutting all the major fast fashion brands.

According to the Times, Boohoo has now entered talks with Teneo, which is advising Missguided, and a deal to buy the fashion retailer could be imminent.

The newspaper said the deal has not been finalised and it was unclear whether Boohoo was interested in buying the Missguided brand or the whole business.

According to a report in the i newspaper, police were called to Missguided’s Manchester headquarters after suppliers turned up demanding overdue payments.

A creditor can apply to a court to close a company if it is unable to pay its debts. The idea is the firm’s assets are sold and those who are owed money will be paid, although after the insolvency company and consultants are paid, there is rarely enough to pay anything to suppliers.

The i said three suppliers for Missguided warned they are at risk of going under due to outstanding payments.

A Missguided spokesperson said: “Missguided is aware of the action being taken by certain creditors of the company in recent days and is working urgently to address this. A process to identify a buyer with the required resources and platform for the business commenced in April and we expect to provide an update on progress of that process in the near future.”

Missguided was founded by Nitin Passi in 2009 and grew to become one of the UK’s biggest online fast-fashion players. The brand later expanded into Europe, the US and Australia and now ships to more than 180 countries.

Mr Passi stepped down as chief executive in April.

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