Shein Acquires Struggling UK Brand Missguided to Expand Its Fashion Empire

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Shein’s Rise to Fame

Shein, the Singapore-headquartered fast fashion giant, has been making waves in the industry with its nimble supply chain in China. The company’s ability to respond swiftly to consumer behavior and keep inventory costs down has propelled its valuation to an impressive $100 billion in April 2022. However, this year saw a reported slash in Shein’s price tag to $64 billion as it sought $3 billion in new funding.

Missguided: A Struggling Fashion Brand

Missguided, a British fashion brand based out of Manchester, has been struggling since the reopening of physical stores. The company had enjoyed rapid growth during the pandemic but has faced financial troubles and criticism from environmentalists for encouraging overconsumption. In December 2021, Alteri, a retail investor backed by Apollo Global Management, saved Missguided by taking over its debt and a 50% stake.

Shein’s Acquisition of Missguided

In a statement released on Monday, Shein announced its acquisition of Missguided from Fraser Group for an undisclosed amount. This confirms a report by Sky News in September that Shein was in talks to buy Missguided. The deal marks a significant shift in power dynamics in the fast fashion landscape, with companies like Shein establishing strong ties with Chinese manufacturers.

On-Demand Manufacturing Approach

Shein’s on-demand manufacturing approach allows the company to respond swiftly to consumer behavior and keep inventory costs down. This approach has been a key factor in Shein’s success, and it will be interesting to see if the company can apply this formula to revitalize the Missguided brand.

Joint Venture with Missguided’s Founder

Following the deal, Missguided’s founder Nitin Passi and Shein are 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.

Criticism from Environmentalists

Missguided has faced criticism from environmentalists for encouraging overconsumption, a challenge that Shein also faces. In 2019, Shein was involved in a major backlash for its promotion of £1 bikinis, a loss-making marketing stunt that attracted a flood of enthusiastic buyers.

Acquisition of Forever 21 Operator

Just two months after the Missguided acquisition, Shein said it had bought a minority stake in the operator of the California-based fast fashion pioneer Forever 21. The company 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.

Topics: China, Commerce, Fast Fashion, Shein, Singapore

Rita Liao is a reporter covering Asia for TechCrunch, with a special interest in Chinese companies going global and web3 projects with real-world applications. Before her previous writing stints with Tech in Asia and TechNode, Rita managed communications for SOSV’s accelerators in Asia.

Key Takeaways

Shein has acquired Missguided from Fraser Group for an undisclosed amount.
The deal marks a significant shift in power dynamics in the fast fashion landscape.
Shein will take over the manufacturing and distribution of products from the joint venture with Missguided’s founder.
Missguided has faced criticism from environmentalists for encouraging overconsumption.
Shein is expanding its product range by scooping up competitors.

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