Shein adds struggling UK brand Missguided to its fashion empire.
You probably know the name of the Shein brand from China. Chinese fast-fashion giant Shein has acquired British online retailer Missguided, this deal was held in May. The terms of the deal were not disclosed. Shein wants to take over the brand.
Misguided the struggling brand from UK:
Missguided, which was founded in 2009, has been struggling financially for some time. In recent months, it has been hit by supply chain disruptions and rising costs. The company has also been criticized for its poor working conditions.
An Introduction of Shein:
Shein, which is based in Shanghai, is one of the world’s largest online retailers. It has been growing rapidly in recent years, thanks to its low prices and wide range of products.
Shein is a Chinese online fast-fashion retailer that was founded in 2008 by Chris Xu.
The company is based in Guangzhou, China, and has gained significant popularity for its trendy and affordable clothing and accessories.
Shein primarily targets young women and offers a wide range of fashion items, including dresses, tops, bottoms, shoes, and accessories.
Shein wants to grow in the UK market by taking over the Misguided:
The acquisition of Missguided is seen as a sign of Shein’s ambitions to expand into the UK market. The deal is also likely to raise concerns about the working conditions at Missguided’s factories.
It remains to be seen if Shein can use its formula for success to bring the struggling Missguided brand back to life.
Missguided, which was once praised for being a leader in online fashion alongside companies like Asos, Boohoo, and PrettyLittleThing, experienced significant development during the pandemic but has faced difficulties since physical stores reopened.
Misguided current market position:
Missguided was salvaged in December 2021 when Alteri, a retail investor supported by Apollo Global Management (Apollo is the parent company of Yahoo, which owns TechCrunch), assumed 50% of the company’s debt.
Missguided received a winding-up petition in May of last year from its suppliers who owed the company millions of pounds.
A winding-up petition is when creditors ask the court to order the closure of their debtors. Subsequently, in June, Missguided was acquired by Fraser business, a British retail business, for $20 million, which may have revealed Shein’s purchase price.
Aside from financial difficulties, Missguided has come under fire from environmentalists for promoting an excessive consumption culture—a problem that Shein also encounters. The brand faced significant criticism in 2019 for promoting £1 bikinis, a costly marketing gimmick that drew a flurry of eager customers.
After the transaction, Shein and Nitin Passi, the founder of Missguided, are establishing a joint company that will have licensing rights to Missguided’s intellectual property. Shein is going to take over the joint venture’s product distribution and manufacturing.
The announcement of Shein’s acquisition of a minority interest in the operator of Forever 21, a pioneer in fast fashion based in California that filed for bankruptcy in 2019 but is still in business under new ownership, coincided with the Missguided takeover. Shein will create, produce, and market a line for Forever 21
Well, Shein is looking to expand its product range and offerings through Missguided’s portfolio of brands will give it access to new categories, such as lingerie and activewear.
Will Shein achieve success in the UK market? Let’s see.
