It was billed as the bikini that “won’t break your bank balance but might break the internet” because of the predicted stampede of shoppers to get their hands on a skimpy black polyester two-piece.

The £1 costume from Manchester-based online retailer Missguided went on sale nearly a fortnight ago, but hit the headlines last week when it was advertised during Love Island – a show the retailer has used for its promotions before. Last year Missguided sponsored the show and the few clothes worn by the contestants were all from its ranges.

The black bikini did indeed cause the expected internet sensation, but not for its sex appeal. Fast fashion critics took to social media to label it a symbol of a throwaway fashion culture that now sees British shoppers throw away a million tonnes of clothing each year.

The outrage was heightened by the government’s decision on Tuesday to reject plans for a 1p fashion tax that had been proposed following an investigation by MPs on the Commons environmental audit committee (EAC). Until then, Missguided’s biggest problem had been keeping up with customer demand: the bikini was selling out in every size – from 4 to 24 – within 45 minutes after each restock.

Founded a decade ago by Nitin Passi, Missguided is among a small number of internet fashion brands to have enjoyed success at a time when the traditional high street is on its knees.

While big names like Marks & Spencer (M&S), Topshop and Monsoon are struggling to hang on to their ageing customer bases, Missguided and online rivals Asos, Boohoo and PrettyLittleThing have cleaned up, selling inexpensive fashion to young women in their teens and twenties who shop online rather than on the high street.

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Passi told the Observer that despite the furore, the company was not embarrassed about the £1 bikini as it was being sold at a loss as a marketing stunt – designed to pull in the punters to sell them other items at the same time.

Last year’s Love Island, where contestants regularly wore clothes by Missguided.



Last year’s Love Island, where contestants regularly wore clothes by Missguided. Photograph: James Gourley/ITV/REX/Shutterstock

“I think we have to careful not to confuse the symbolism of totems with real issues,” says Passi. “The £1 bikini was priced to generate interest and we’re not embarrassed about it. We’ve always lived close to the edge when it comes to marketing, but we’re comfortable with that because there are never shortcuts when it comes to the product.”

The 36-year-old entrepreneur, who started Missguided in 2009, accepts that it was perhaps “inevitable” that the product would be judged in the context of the government’s response to the EAC. But he adds: “Our £1 bikini was sourced no differently to anything else we offer. It was made by one of our audited supplier partners and with the same meticulous attention to detail as every item on our site, whether it’s £20 or £200.”

With the exuberance of a dotcom-era startup, Missguided’s headquarters in Salford Quays – sandwiched between the Manchester United stadium and the BBC’s Media City – feature a “selfie tunnel” and a meeting room with swings instead of chairs. In one YouTube video the former Cranleigh schoolboy conducts a tour of the HQ he refers to as a “crib” while riding a hoverboard.

Britons buy more new clothes than any other country in Europe, with high-street clothing chains in thrall to a fast-fashion model that demands new products arrive in store every week – rather than at the start of each season – to satisfy shoppers’ insatiable appetite for novelty.

Missguided claims that it goes one better than fast fashion by offering “rapid” fashion, with 1,000 new products landing on the site every week: dresses start at £8 and you can buy a pair of jeans and a T-shirt for around £20. By last year the business had shifted more than £200m worth of clothes, although it is still a minnow compared to market leader M&S, which has a clothing business worth more than £3bn.

Despite a welter of consumer surveys highlighting the growing ethical and environmental awareness of millennials and Generation Z, the sales of online fashion companies tell a different story. At the last count, Boohoo’s sales were up 27%, while PrettyLittleThing’s had surged by 42%. Asos’s sales last year were £2.4bn.

Those huge sales uplifts are coming in a £48bn clothing and footwear market that has been shrinking for several years – as, despite the shocking picture of waste revealed by the EAC inquiry, Britons are buying fewer clothes and choosing to spend their disposable income on other things.

“I would argue that what consumers say and do are in reality two different things,” says Retail Economics’ chief executive, Richard Lim, who points to the huge success story that is Primark, despite its historical connection to the Rana Plaza factory disaster in Bangladesh.

“The consumer surveys paint a different picture, but there is not much evidence of shoppers voting with their wallets and taking their spend away from these [fast-fashion] retailers.”

In 2017, when Missguided was exploring bringing in outside investors, the company – which is 100% owned by Passi – was judged to be worth as much as £700m by analysts. However, its wings were clipped spectacularly a year later when the decision to open a handful of stores proved disastrous and the company crashed to a pre-tax loss of £46m in 2018.

The Missguided stores failed to cover their costly rent bills and Passi, who had ceded some control to senior management, was forced to retake the reins and lead a turnaround. The business is now in a “much better place”, he says.

Like Umar Kamani, the larger-than-life 31-year-old boss of PrettyLittleThing, Passi has created a brand that resonates with a new generation of shoppers which marketers say are hard to reach. The Missguided brand is all about “babe power”: its customer base are all “babes” and the website featuring a “babeZine” where they can read about everything from “WTF do I wear for massive boobs?” to working in social media.

Passi insists the business is not built on his family connections – his father is a successful clothing supplier – since their expertise is in dressing a different demographic: “I borrowed £50,000 from my dad in 2009 and paid him back in 2010,” he says.

Missguided founder Nitin Passi and singer Rainy Milo in London, 2017.



Missguided founder Nitin Passi and singer Rainy Milo in London, 2017. Photograph: David M Benett/Getty Images

Missguided is based in Manchester mainly because Passi’s uncle offered him free office space at the back of one of his factories to get started.

He attributes its success to a nimble business model that is able to react to what its customers are talking about on social media. “It’s about the speed of what we offer,” Passi says. “Talking to them where they are through social.”

The rise of internet shopping has been a major factor in the current high-street crisis: online marketplaces such as Amazon and Asos have altered the way many Britons shop forever. This shift has contributed to the financial collapse of the Debenhams and House of Fraser department store chains but also smaller brands at all price points, from upmarket kitten-heel seller LK Bennett to inexpensive clothing chain Select.

A new report on the UK shopping market by global real estate adviser Colliers International makes the case that the “golden age” of online retailing could be coming to an end as websites start facing up to the shortcomings of their own business models – not least the cost of processing their daily mountain of returns.

James Watson, Colliers’ head of retail capital markets, says: “The days when you could order three items of clothing in different sizes, in the knowledge that you could return them free of charge, are coming to an end. Online retailers are making moves to improve their [profit] margins by changing their service to customers.”

Recently, online giant Asos changed its returns policy to clamp down on “serial returners” – shoppers who regularly buy clothes, wear them and then return them for a refund. Its perceived challenges are reflected in a share price that has fallen by nearly 60% over the last year as investors question an investment-hungry business model amid slowing growth and a profit squeeze.

“People are realising that there’s no such thing as truly ‘free delivery’,” says Watson, who points to the prospect of suburban roads clogged with delivery vans. “The upcoming generation of shoppers is questioning the wisdom of items travelling huge distances – only for them to be returned and rack up more ‘product miles’.”



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