Home Tachnologies Shein adds struggling UK brand Missguided to its fashion empire

Shein adds struggling UK brand Missguided to its fashion empire

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Shein adds struggling UK brand Missguided to its fashion empire

Shein, the fast fashion giant that has thrived on its nimble supply chain in China, is expanding its product range by scooping up competitors. In a statement released on Monday, the Singapore-headquartered firm announced its acquisition of Missguided, a struggling fashion brand based out of Manchester, U.K., for an undisclosed amount from Fraser Group.

This confirms a report by Sky News in September that Shein was in talks to buy Missguided.

Shein’s investments in the distressed British firm mark a significant shift in power dynamics in the fast fashion landscape. Once dominated by Western brands, the industry is now gravitating towards companies like Shein that have established strong ties with Chinese manufacturers. These partnerships, combined with Shein’s supplier software that matches factory capacity with real-time demand, allow the fashion giant to respond swiftly to consumer behavior and keep inventory costs down.

This on-demand manufacturing approach catapulted Shein’s valuation to $100 billion in April 2022. But the firm’s price tag was reportedly slashed to $64 billion earlier this year as it sought $3 billion in new funding. As of October, Shein claims it has “150 million global users.”

Time will tell if Shein will be able to apply its success formula to revitalize the besieged Missguided brand. Once hailed as a trailblazer in online fashion alongside the likes of Asos, Boohoo and PrettyLittleThing, Missguided enjoyed rapid growth during the pandemic but has struggled since the reopening of physical stores.

In December 2021, Alteri, a retail investor backed by Apollo Global Management (Apollo is the parent of Yahoo, which owns TechCrunch), saved Missguided by taking over its debt and a 50% stake. In May last year, Missguided was issued a winding-up petition — which happens when creditors apply to the court to shut down their debtors — by its suppliers owed millions of pounds. Then in June, British retail group Fraser Group bought Missguided out of administration for $20 million, which might give an indication of how much Shein paid for the acquisition.

Financial troubles aside, Missguided has encountered criticism from environmentalists for encouraging a culture of overconsumption, a challenge that Shein also faces. In 2019, the company had a major backlash for its promotion of one-pound bikinis, a loss-making marketing stunt that attracted a flood of enthusiastic buyers.

Following the deal, Missguided’s founder Nitin Passi and Shein is forming a joint venture that gets access to Missguided’s intellectual property under a licensing agreement. Shein will take over the manufacturing and distribution of products from the joint venture.

The Missguided buyout came just two months after Shein said it had bought a minority stake in the operator of the California-based fast fashion pioneer Forever 21, which filed for bankruptcy in 2019 but has continued to operate under new owners. On the heels of the investment, Shein will design, manufacture and distribute a line for Forever 21.