Retail conglomerate Frasers Group has sold the Missguided fast-fashion brand to Shein and hinted a further potential collaborations with the Chinese ecommerce giant – which analysts say could represent a “transformational milestone” for the British company.
The divestment, made for an undisclosed sum, marks Shein’s first acquisition of a British fashion brand.
The deal was in line with Frasers’ “disciplined approach to managing its portfolio of brands”, the company said on Monday.
It was announced in mid-September that Frasers was currently in advanced negotiations to sell Missguided, just 18 months after the former saved the latter from administration.
Under the terms of the transaction, Shein is acquiring the intellectual property and trademarks of Missguided, but the real estate and employees will be retained by Frasers, as these have already been integrated into its wider fashion division.
“With I Saw it First and Missy Empire, we now have a foothold in women’s digital-first fashion, said Frasers chief executive Michael Murray. “Retaining the combined Frasers fashion teams whilst rationalising our portfolio in this space to focus on fewer brands makes a lot of sense in the current climate.”
Frasers added the transaction has started “exciting discussions” with Shein about the potential for further collaboration across the brand portfolio.
Last month, analysts at Shore Capital said that a potential deal could result in a “strategic partnership” between SHEIN and Frasers, given Shein’s recent investment in SPARC Group, which operates high street name Forever 21.
“As part of its deal with Forever 21, Shein is considering providing customer services like returns at Forever 21’s physical locations. A similar arrangement could be made with Frasers’ stores, offering customers more flexibility and thus enhancing customer experience,” the broker said.
Frasers could stand to benefit by listing stock as a third-party retailer on Shein’s platform, Shore Capital said, which would open up 120 million further users across the globe.
