Mike Ashley’s Frasers is in talks to partner with Shein after striking a deal to sell the Missguided brand to the Chinese fast fashion giant.
Frasers chief Michael Murray said discussions about “further collaboration” with Shein were ongoing as he confirmed the sale of Missguided’s intellectual property and trademarks.
Confirmation of the talks comes after Shein last week announced a long-term deal with Forever 21 to design, make and sell a line of clothing for the US retailer.
Shore Capital analyst Eleonora Dani speculated that Frasers could be angling to stock Shein products in its stores.
Ms Dani said: “Such a strategic partnership would naturally complement both parties’ capabilities and reach.
“Frasers would benefit from the footfall generated by Shein shoppers, while Shein would leverage Frasers’ physical stores as an entry into traditional retail channels.”
Frasers declined to comment on the substance of talks with Shein.
The deal to buy Missguided from Frasers marks the Chinese fashion retailer’s first acquisition in Britain. Ms Dani said the UK was “one of its fastest growing markets”.
Founded in Nanjing in 2008, Shein has grown to become one of the world’s biggest online fashion retailers. It has recorded explosive growth in recent years thanks to Gen Z shoppers who have been lured in by its cheaper versions of high street clothes.
Sales in the UK were £1.1bn last year and Shein has become one of ten biggest clothing retailers in Britain, according to GlobalData.
Shein’s rapid growth has been accompanied by criticism of its business practices. The company has been accused of contributing to overconsumption and landfill waste, while questions about its supply chain have also been raised.
Factories suppling Shein were found to have been in breach of Chinese labour laws
Credit: Raul Ariano/Redux
Last December it admitted that working hours at two factories where it sourced clothes breached regulations and there have been calls for an investigation into Shein’s use of cotton from Xinjiang, a region where Uyghur forced labour is used.
Shein has vowed to invest $15m in improving standards at supplier factories and has pledged to eliminate Xinjiang cotton from its supply chain. Shein said it has a “zero-tolerance policy for forced labour”.
Frasers bought Missguided out of administration last June for £20m but said it wanted to sell the brand to focus on others women’s clothing brands it owns. Frasers has bought I Saw It First and Missy Empire since the Missguided rescue.
Mr Murray said: “With I Saw it First and Missy Empire, we now have a foothold in women’s digital-first fashion.”
The company will retain Missguided’s properties and employees, who have already been integrated into its fashion division.
Frasers has been buying up stakes in a host of online retailers in recent months, including Boohoo and Asos.
The group is Boohoo’s biggest investor and owns almost a fifth of Asos. Frasers has also built up significant positions in AO World and Currys, saying the moves are strategic and designed to facilitate working more closely with those brands.
