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The backstory: Shein is a Chinese fast-fashion company that started in 2008 and now calls Singapore its home base. It set its sights on the US market in 2017, quickly becoming the go-to place for trendy and budget-friendly fashion. Earlier this year, there was talk of Shein trying to secure about US$2 billion in funding and potentially going public on the US stock market. It’s since come out to say that it hasn’t filed to go public in the US, but the rumors of a future initial public offering (IPO) are still swirling.
On the other side of the fashion runway, we have Missguided, a UK-based online fashion store founded in 2009 that caters to the younger crowd. It’s known for its iconic £1(US$1.22) bikinis and has firmly established its presence in the fast-fashion industry. But the company hit a rough patch last year due to supply chain issues, rising shipping costs and fierce competition, leading it to call in administrators in late May. Afterward, the Frasers Group acquired the brand for £20 million (around US$24.3 million).
More recently: Last week, Shein announced a collaboration with its former rival, Forever 21, to launch a co-branded clothing line. Shein also got a piece of Sparc Group, which houses Authentic Brands Group and Simon Property Group. To top it off, Shein's clothing is now hitting the shelves at Forever 21 stores.
The development: Shein has just acquired Missguided from the Frasers Group. What's the big picture here? Shein has its eyes on global expansion and increasing its market share. In this deal, Shein is taking charge of making and selling Missguided's products on both of their websites. But the Frasers Group will still hold onto Missguided's real estate and employees.
Shein also plans to license Missguided's intellectual property to Sumwon Studios, a joint venture involving Shein and Missguided's founder, Nitin Passi. Sumwon Studios will be the brains behind managing and running the Missguided brand, but the nitty-gritty details of the deal are still a bit of a mystery.
"The joint venture we have entered ushers in a new format of partnerships for SHEIN," said Donald Tang, executive chairman of Shein in a statement on Monday.
"This move is particularly noteworthy because it marks Shein's first acquisition of a British brand, aligning well with its focus on the UK as one of its fastest-growing markets," said Shore Capital analyst Eleonora Dani.
"We are also excited about the ongoing discussions around further collaboration between Frasers Group and Shein," said Frasers CEO Michael Murray.