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Shein Acquires Struggling UK Fashion Brand Missguided

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Shein Expands Product Range with Acquisition of Missguided

A Shift in Power Dynamics in the Fast Fashion Landscape

Singapore-headquartered Shein has announced its acquisition of Missguided, a struggling fashion brand based out of Manchester, U.K. This move marks a significant shift in power dynamics in the fast fashion landscape, where companies like Shein have established strong ties with Chinese manufacturers.

Shein’s Success Formula

Shein’s on-demand manufacturing approach has been key to its success. The company uses supplier software that matches factory capacity with real-time demand, allowing it to respond swiftly to consumer behavior and keep inventory costs down. This approach catapulted Shein’s valuation to $100 billion in April 2022.

Financial Troubles of Missguided

Missguided has struggled since the reopening of physical stores after the pandemic. In December 2021, Alteri, a retail investor backed by Apollo Global Management, saved Missguided by taking over its debt and a 50% stake. However, financial troubles persisted, with suppliers owed millions of pounds issuing a winding-up petition against the company in May last year.

The Acquisition

The acquisition of Missguided marks Shein’s latest move to expand its product range. As part of the deal, Shein will take over the manufacturing and distribution of products from Missguided’s joint venture with founder Nitin Passi. The joint venture gets access to Missguided’s intellectual property under a licensing agreement.

Challenges Ahead

Shein faces challenges ahead in revitalizing the besieged Missguided brand. Environmentalists have criticized both companies for encouraging a culture of overconsumption, with Shein previously facing backlash for its promotion of £1 bikinis in 2019.

Shein’s Growing Presence

This acquisition comes just two months after Shein said it had bought a minority stake in the operator of Forever 21. As part of this investment, Shein will design, manufacture, and distribute a line for Forever 21.

Impact on the Fast Fashion Industry

The acquisition highlights the shift towards companies like Shein that have established strong ties with Chinese manufacturers. This shift in power dynamics is expected to continue, with Western brands struggling to compete with the efficiency and scale of their Asian counterparts.

Shein’s Valuation

Despite its growing presence, Shein’s valuation reportedly plummeted by a third earlier this year as it sought $3 billion in new funding. As of October, Shein claims it has 150 million global users.

Conclusion

The acquisition of Missguided marks a significant milestone for Shein as it continues to expand its product range and grow its presence in the fast fashion industry. However, challenges ahead will require Shein to address environmental concerns and revitalize the struggling Missguided brand.

Timeline of Events

  • 2019: Shein faces backlash for promoting £1 bikinis
  • December 2021: Alteri saves Missguided by taking over debt and a 50% stake
  • May 2022: Suppliers owed millions issue winding-up petition against Missguided
  • June 2022: British retail group Fraser Group buys Missguided out of administration for $20 million
  • October 2022: Shein announces acquisition of Missguided

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