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Fast-fashion group Shein has acquired the Missguided brand in its first acquisition of a British label, as the Chinese-founded group faces a growing threat from a well-funded new rival.
Shein bought the brand from Frasers Group for an undisclosed amount, the British retailing group said on Monday.
Shein, which is headquartered in Singapore, is doubling down on the UK market as it battles competition from Pinduoduo’s Temu, an ecommerce platform that has replicated Shein’s model of shipping cheap goods from manufacturers in China to consumers in the west.
The Financial Times previously reported that Shein was targeting an initial public offering in the US, its biggest market, as early as this year. One person familiar with its plans said it was now expected to launch the IPO in the next six to nine months, given broader economic malaise and an anaemic listings market.
Robin Zhu, analyst at Bernstein, said Shein was “buying growth” during a “do-something moment” for the company. “Shein’s growth is being impacted by Temu in the US. Temu has only existed for just over a year but managed to match Shein’s scale in the US,” he said.
Shein recently announced a joint venture with Forever 21, a fast-fashion brand popular with Gen Z shoppers, which could see the group expand its footprint into physical retail stores. Sequoia Capital and General Atlantic are among the groups that have backed Shein.
The disposal by Frasers comes just over a year after it bought Missguided out of administration for £20mn to bolster its offering to women. Chief executive Michael Murray said on Monday that it continued to “have a foothold in women’s digital-first fashion” through its other brands I Saw it First and Missy Empire.
Frasers said it would retain existing staff, having integrated Missguided into some of its operations and added there was scope for “potential collaboration” with Shein.
Frasers, which was founded by billionaire retailer Mike Ashley and owns Sports Direct, has been building stakes in other online fast-fashion retailers in recent months such as Asos and Boohoo.
Nick Bubb, an independent retail analyst, questioned these investments following the Missguided disposal: “Well . . . there isn’t much point in Frasers having a stake in struggling Asos unless it can exert pressure to get control of its better brands.”
