Market Loop - Fast fashion favourite on the ropes

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30th May 2022

Bite-sized business news from the UK and beyond

Good morning Congratulations to Nottingham Forest, who yesterday won the Championship play-off final at Wembley, often dubbed the richest match in world football with the winning team receiving a promotion to the Premier League and an estimated £170m.

Today's stories

Fast fashion favourite on the ropes
Investors turn to art in record levels

RETAIL
Fast fashion favourite on the ropes

What happened?
Missguided, the fast fashion retailer popular among under-30s, is edging closer to collapse and could go into administration later today. It follows reports last week that police were called to the retailer's headquarters after suppliers turned up demanding overdue payments be made.

The fashion industry has been hit hard by disruptions to the global supply chain
Fast fashion companies import huge amounts of clothes from around the world, most especially in Asia. But global shipping routes have faced increased demand as economies reopen post lockdown leading to higher transport costs for retailers. On top of that hubs for fast fashion producers like Vietnam have faced a shortage of workers, particularly in facilities located in Covid hit areas.

This meant rising costs and trouble with suppliers for Missguided
The company has been plagued by surging shipping costs and labour shortages that have prevented it from sourcing stock in tight timeframes. On top of that it's faced tough competition from rivals like Shein and Boohoo.

This has led to unpaid bills and one of Missguided's suppliers has applied to the courts to close the company as a way for it to pay its debts. The idea is the firm's assets are sold and those who are owed money will be paid.

It marks a change of fortunes
Missguided was founded in 2009 and grew to become one of the UK's biggest online fast-fashion retailers. It expanded to ship to 180 countries in Europe, North America and Asia.

What happens next?
Last autumn, Missguided secured emergency funding from investment firm Alteri and announced redundancies in December as part of a turnaround plan.
Alteri are now on the hunt for a buyer as its founder, Nitin Passi, stepped down as CEO. JD Sports and Shein have been linked with potential bids.

Other stories to keep you in the loop

Chelsea sale: Todd Boehly consortium set to complete deal on Monday
Help to Buy application deadline brought forward by 2 months
KPMG to hire 3,500 tech workers for new digital products business
Beckham-backer Authentic Brands Group in talks to seal £300m Ted Baker takeover
Japan to reopen to foreign tourists after two-year pandemic closure
Payments start-up Bolt lays off a third of its 900 staff

INVESTING
Investors turn to art in record levels

What happened?
After a pandemic slump, the global art market hit near-record highs in 2021 with $65bnin sales, a ~30% increase from the year before. The upswing shows no signs of stopping as recent auctions by Christie’s and Sotheby's have fetched hundreds of millions.

Earlier this month, an Andy Warhol silkscreen of Marilyn Monroe sold at Christie’s for $195m after four minutes of bidding becoming the priciest sale of any American artwork at auction, and the most expensive 20th-century artwork to sell at auction.

What’s driving art’s big money moves?

Pandemic-era online bidding has allowed new buyers to participate anywhere without using an intermediary, creating a new pool of bidders (particularly from Asia).
A steady stream of new billionaires (one for every 30 hours since the pandemic started) getting in on the action has created a demand for lesser-known artists.
Art is seen as a safe investment in an increasingly uncertain stock market, providing stable long-term returns with gains comparable to those of high-yield bonds.
Big names have been hitting the market, not just Andy Warhol but pieces from renowned artists like Jean-Michel Basquiat and Mark Rothko commanded eight-figure bids.

Why it matters
Art auctions are more visible than ever before (Christie’s live-streams this month drew 3.7m viewers) but still aren't accessible for most. Despite platforms like Masterworks and Artsy that aim to make fine art more affordable, the world of collecting is still the domain of the excessively wealthy.

Stat of the day

More than 16,000 street parties are expected to be thrown over the Queen’s Platinum Jubilee bank holiday weekend

Interesting links from around the web

Advice on how to invest during a recession
Why Gen Z workers are already so burned out
10 uses for baby powder with no baby required

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Market Loop - Fast fashion favourite on the ropes

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