LONDON — The U.K. high-street might be going through one of its most challenging periods since the financial crisis of 2009, but Missguided – the fast-fashion retailer aimed at millennials – is on an upward journey. Last December, the company, which began as an e-tailer, opened the doors to its first brick-and-mortar store at the Westfield Stratford shopping center, and is planning to tap into a series of new categories to sustain growth in 2017.
A collaboration between the retailer, known for its tongue-in-cheek pink website, and Jourdan Dunn will make its debut on Friday, Feb. 17, the first day of London Fashion Week, while the launch of a women’s fragrance and a new men’s wear label called Menace are slated for later this year.
Nitin Passi, the company’s founder and chief executive officer, said he wanted to create an agile and “highly-reactive” business model that would enable the company to respond to consumer demand and industry trends quickly. “After the first two years I created the brand, a common theme was that our customers wished Missguided had a store,” said Passi during an interview.
The decision to open at Westfield’s east London branch came after he learned the center has the highest footfall in the country for millennials. Passi said he sees the opening as an exercise in branding as much as a sales generator; the store comes with a gigantic pink monster truck installation, life-size mannequins, flashy dollar signs, and pink wallpaper with palm tree prints and flamingo sculptures, all meant to lure social media-savvy customers into the store.
“We need to get the brand across. It’s not just about selling as much as possible. When I created our store, I wanted to make it into the most Instagrammable store ever,” said Passi. “I think we may have gone a bit too far with the space; I could fit 20 extra rails where the monster truck is, but we are going to have it travel to each new store we open.”
Developing the brand’s retail footprint is among Passi’s immediate plans. He has already signed the lease for a new space at the Bluewater shopping mall in Kent, England and is considering additional locations, including Westfield in west London, as well as Liverpool and Manchester, with the goal of reaching 15 to 20 stores at key locations around the country.
“It’s really important to have a physical presence, as our customers still want to shop on the high street, even the younger customers. Why wouldn’t we want to have a portion of that spend?” added Passi. “What it also allows us to do is scale the business, by franchising. We’ve already had a number of people wanting to franchise the brand in the Middle East, South America or South East Asia, which are markets we wouldn’t necessarily target now, but franchises would allow us to have a bigger footprint a lot quicker – and I’m all about growing the business as profitably and as quickly as I can.”
Passi is moving into retail after building up the wholesale business over the last two years, via a partnership with Selfridges on a series of concessions and deals with Nordstrom and high-street rival Asos. Wholesale now accounts for 10-15 percent of the business.
Passi said he still envisions e-commerce being at the heart of the business, despite the brand’s aggressive retail expansion plans. Sales on the website are set to reach 180 million pounds, or $225 million, this year while the Westfield Stratford store is estimated to generate 10-20 million pounds, or $12 million to $25 million.
The brand’s strategy is to offer of-the-moment pieces, drawing inspiration from the runways, social media influencers and the Kardashian clan. Given the speed of social media and the ever-changing nature of trends, the company has been designed as a quick-response mechanism. Hot products can go from design to sale in as little as 10 days.
This business model has been embraced by a series of new retailers, including Boohoo and Pretty Little Thing, who are appealing to young consumers with their on-trend merchandise and quick deliveries.
“Our customer is now demanding newness. Whether that’s a good culture or not, it’s a culture that exists. That’s the era we’re living in, so that’s the game we’re playing,” said Passi.
Occasion wear and party dresses in particular have been among the retailer’s strongest-selling categories since the beginning, but as fashion continues to embrace athleisure, casual wear has also shown significant growth. The opening of the Westfield store also presents an opportunity to expand the accessories category, which “can get lost on the web,” according to Passi.
Prices for the brand can range from 15 pounds or $19 for a sweatshirt to 50 pounds or $62 for a jacket or evening dress.
Missguided is also known for making trendy pieces look more desirable with out-of-the-box advertising and celebrity partnerships.
Unlike other brands which mainly promote ad campaigns via their own social channels and websites, Passi is a big believer in investing in traditional advertising. There are ads for Missguided on the London Underground and on the sides of double-decker buses, as well as on the New York subway.
Associating itself with a wide range of celebrities and influencers has been another focus. The likes of Nicole Sherzinger, Baddie Winkle – an 82-year old style influencer with an Instagram following of 8.2 million – and Pamela Anderson, who posed against the brand’s signature pink backdrop in one-piece swimsuits and barely there dresses, have acted as brand ambassadors. Passi went as far as to cover his Lamborghini with images from Anderson’s campaign to spread the word.
“I’m not a marketing expert, but I think it’s a great way of capturing the attention of our customer and bringing the brand alive. If you’re an online brand, you need to make people aware of who you are,” added Passi, pointing to the brand’s sponsorships of U.K. television shows on MTV.
Jourdan Dunn is the latest famous face to be associated with the retailer, producing a capsule collection of sport’s wear-inspired pieces, dubbed Londunn x Misguided.
“Jourdan will give us a lot of credibility because she is a supermodel. She created a huge athleisure range which we want to keep on doing for a few seasons. She’ll want to wear it out, and give it to her circle of friends, which includes a lot of influencers, so it will work well,” said Passi.
The new line will be officially unveiled during an event held on the first day of London Fashion Week at London’s Edition Hotel.
Passi is taking the same approach when it comes to the launch of his new men’s label, Menace, which will have a separate website, but will be promoted through Missguided upon its launch, planned for September.
“I want to bring some of that excitement back on the men’s high street and some of that reactivity. If you ask me to think of a high street men’s wear retailer campaign, I can’t think of anything cool,” said Passi, who had men’s wear in his mind since launching Missguided in 2008. “The aim is to be relevant. At the moment, it’s about street wear, Yeezy, Gosha Rubchinsky and we are looking at what’s happening on the high street, but doing it quicker and cooler.”
Passi also admitted to investing the majority of the company’s revenues into new launches and branding initiatives, but in the last 6 months he started to shift his focus to infrastructure with the aim of providing seamless service. “We haven’t been focusing on our service as a whole, but now we’ve started to change by investing hugely to ensure our delivery prices and delivery cut-offs are more competitive. We didn’t have free returns for over 6 years, which is kind of bad, but we now introduced the service.”
Transparency in the supply chain is also among the goals of the company, which was recently criticized in the Channel 4 documentary “Dispatches,” which investigated the pay of British textile workers. “We want to try and control more of our production. The nature of the fashion industry means that you give your designs to a supplier and that supplier will have his factory or sub-contract it out, so we’re trying to get visibility. I think it’s a government problem more than a fashion problem,” said Passi, pointing to an initiative to set up hubs next to the company’s British and Chinese suppliers in order to have more control of the production process.
As the country’s economy post-Brexit remains uncertain, Passi plans to apply the same agility that has defined the business so far to ensure it remains profitable.
“With the big devaluation of the pound our costs have gone up, but we sell a lot into Europe and the U.S., so it balances out. At the moment it’s not affecting us and we’ve grown about 70 percent in the past year. If we can no longer have free trade in Europe, it might just mean adding more warehouses within Europe.”