Missguided’s founder Nitin Passi talks about the etailer’s rapid online growth and its first UK move into stores.
For a business that is just six years old, own-brand etailer Missguided has certainly made its impact on the fashion industry. Fast fashion is not only the sector in which it sits, it also describes the pace at which the company moves. This year alone it has undergone a head office move, international site launches, a new app and a number of new ranges in the pipeline.
On June 8, Missguided also made its first UK move into bricks and mortar with a concession in Selfridges at Manchester’s Trafford Centre. When Drapers meets founder and chief executive Nitin Passi at one of his favourite London hotspots, The Arts Club on Dover Street, he explains the thinking behind this launch. “We have a strong brand and great product. Selfridges allows us to align ourselves with another great brand, test the product in-store and allow our customers to touch it. It’s our own staff and our own stock – we trade the store.”
Aged just 32, Passi is passionate, focused and highly ambitious. He has a background in fashion; after studying business management at Newcastle University, he initially went to work for his father Danny Passi’s company, wholesale supplier By Design. He came up with the idea of Missguided in 2008 when his father started winding down his UK business.
The website went live on March 4, 2009. In November that year, we hit £100,000 turnover
With a £50,000 loan, he set up the first website for £3,000 and bought £5,000 worth of stock. He says: “I used to read Drapers religiously and all I was reading about was how ecommerce business was picking up amid the doom and gloom of the recession. So I thought, ‘Let’s have a go at it.’ I didn’t have a clue how to run my own business, let alone set up a website, but I learnt on the job. For the first 12 months I did absolutely everything. I got to understand how all areas of the business work. The website went live on March 4, 2009. In November that year, we hit £100,000 turnover”.
Right from the beginning the strategy was to test, react and maximise, and Passi will use this same approach with Selfridges. The initial space in Selfridges will be 420 sq ft, but he already wants a bigger area and hopes to roll out to other Selfridges stores once the launch is successful.
Darryl Adie, UK managing director of ecommerce agency Ampersand, believes this is a good move for the etailer to attract a new customer base. He says “By setting up shop in Selfridges, Missguided is opening itself up to a new demographic. It is making it ‘OK’ for shoppers who may not have otherwise purchased from Missguided to now purchase from the retailer.”
With 1,000 new products being added to the Missguided site every week, Passi says they had to think hard about the selection on offer in Selfridges, which will feature around 100 styles. For launch, there will be three different collections available: partywear, boho festival and holiday. In keeping with the fast pace of the product selection on site, 10% will be changed daily to react to what the customer wants and there will be an exclusive element with some items available in Selfridges two weeks before they appear online.
In terms of the UK, Passi is adamant that Selfridges will be the only store Missguided enters for the foreseeable future. However, if proven successful, he indicates that an own-brand store could be an option – although he will not confirm when or where this might happen. The brand is also sold on Asos.com, having launched on the etailer in May 2015. Passi explains that the appeal of Asos was in its international mix. He says “What Asos does for our global brand awareness is great. They take around 100 new products a month and, so far, sales are looking really positive. Will it cannibalise our own sales? It’s something we’ll continue to measure, but at the moment I think not.”
In April, Missguided also launched into stores in the US through department store Nordstrom. While its standard approach when going into new countries is to launch a huge offline campaign (when the French site went live in March 2014 the campaign was advertised on the Paris underground, as well as with a TV campaign), Passi admits that to do this in the US one needs “very, very deep pockets”, so a new approach was needed. The brand initially went into eight Nordstrom stores where a high percentage of the collection sold out within the first week, resulting in it now being rolled out to 32 stores this month, 60 by the end of September and every single Nordstrom store (117 in total) by the end of the year.
Passi believes that a multichannel approach is paramount for the future success of the brand, stating: “I personally think that in five years’ time if we don’t have an offline presence, as an online retailer we will no longer be relevant. I definitely think it’s really important for us to have a presence in both. Our customer does not just shop one channel or just one retailer, so we would be stupid not to be where our customer wants us to be.”
However, that does not mean Passi is taking his eye off the main Missguided site, which this month will go responsive in an aim to increase conversion – currently 2% – from the 60% of traffic coming via mobile. Passi admits that website development has not always kept up with the pace of business growth and is investing in people and technology to look at how Missguided can become a “website of the future”.
The business has taken on its first chief technology officer this year, John Allen, who was previously IT director at Ideal Home Shopping Network and head of IT at Asos. When asked whether he would change anything he has done with the business so far, Passi centres his answer on people. “The one thing I would do differently is invest in certain people earlier than I did; you can’t deny the strength of having a good team around you. It’s only the last 24 months that I’ve really done that.”
We’re very serious about our targets but we like to have fun along the way
The Missguided head office team is currently made up of 260 people and will rise to 300 by the end of the year. The business is aiming to move into its new 44,000 sq ft office space, in Salford Quays, Manchester, by the August bank holiday and Passi is passionate about making it a fun and innovative place to work. It will include a social space on the ground floor of the four-storey building and meeting rooms with swings, seats in the walls and a selfie tunnel (a tunnel of mirrors). He says: “We’re a fun organisation. We’re very serious about our targets but we like to have fun along the way.”
In March, Missguided outsourced its warehouse to logistics company Norbert Dentressangle. Passi says it was a strategic decision as the business had moved five times already and was again running out of space in the current warehouse. He says: “As a business we want to stay agile. We were going to have this massive fixed asset in the UK, which might not be our biggest market in future, so we thought outsourcing when we’re still growing at such a pace was the best way forward.”
As well as the responsive site, this year will also see the launch of a Missguided app, although a specific date has not yet been confirmed. Passi strongly believes that an app should offer something different to a mobile site and says: “We have to give our customer a reason to download the app and constantly use it. We are looking at how we can engage the customer on this platform and give them content they want to interactive with. Engagement for us is key. We don’t want an app for the sake of having an app – we want to go to market with something a bit different.”
Looking at online on an international level, Missguided is also set to launch a German-specific language site after the success of its French equivalent. Currently, UK sales account for 77%, followed by the US at about 8%, France at 7% and Germany at just under 5%. Missguided has specific sites for the UK, US, Australia, France (in localised language and currency) and Europe (selling in euros). The next 12 months will see a continued focus on US and Western Europe.
Alongside this, the business is looking at stretching its price architecture and increasing the product range. Passi explains that Missguided has changed a lot since its initial days, when 90% of the product mix was dresses bought from wholesale. Now he says pretty much everything is designed in-house and dresses (which retail from £10 to £55) only make up 38% to 40% of the mix. He says that in order to attract the core Missguided customer, who is aged 16 to 35 and fashion-conscious, the brand must be a one-stop destination. “We’ve worked really hard over the last 24 months to develop other categories and we had a great season last autumn with coats and jackets. Footwear, which currently accounts for about 8% to 10%, is increasing nicely and has a lot more room to grow.”
Missguided also plans to relaunch its denim offering this year, as well as introduce tall, petite and lingerie collections and relaunch a more premium sub-brand called Peace & Love. This range includes 30 pieces at a 25% higher price point than the average Missguided selection.
In terms of price point, Passi stresses that Missguided has always been an affordable retailer, not a discount retailer. He is currently working on how to stretch the price architecture but still remain affordable. The current average selling price on the site is £18.50 and the average order value sits at £42, although Passi points out that one of the bestselling items for autumn 14 was a £70 coat.
While the business has an abundance of activity going on this year, Passi remains open to adding more to the to-do list, saying: “Missguided is non-stop – it’s like a fun madhouse. We have lots going on and lots of energy. If an opportunity comes and it smells right, then we’ll go for it. We’re in a place where we have grown phenomenally well and we want to continue that, so we can’t sit still. The vision is to be a truly global brand.”