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Frasers Group in talks to sell Missguided to Shein

Chloe Burney
18 September 2023

Retail tycoon Mike Ashley’s Frasers Group is in detailed talks to sell online fashion label Missguided to Chinese retail giant Shein.

This news comes only 18 months after Frasers Group swooped in to purchase Missguided out of insolvency.

Shein, which recently had a $66 billion (£53 billion) valuation, is reportedly in detailed negotiations with Frasers Group, according to Sky News. This move would mark Shein's first acquisition of a British fashion brand.

Sources said that Shein and Frasers had been in discussions for several weeks about a transaction, however it was unclear whether or not this was to soon be announced.

According to another source, the deal would include Missguided's brand and other intellectual property, however its head office would be retained by Frasers Group.

Shein, which was founded in 2012, now operates in more than 150 countries. Now headquartered in Singapore, Shein has thinly disguised ambitions of going public in the US in the next 12 months, and is lining up investment banks to handle an initial public offering.

Missguided was founded in 2009 by Nitin Passi and grew rapidly amid rising demand for online fashion. However, the company was hit hard by surging supply costs, wider inflationary pressures and waning consumer confidence in the increasingly competitive market.

The company attracted investment from Alteri Investors in late 2021, but crashed into administration after the brand was issued with a winding-up petition by suppliers who were owed millions of pounds.

Boohoo Group was among the suitors for the Missguided brand before Frasers swooped to buy it from administrators Teneo.

Frasers has been steadily building up stakes in both ASOS and Boohoo Group. It now owns a near-20% in ASOS and around 10% of Boohoo Group shares. The move has led to speculation that it may try to pull off an online fashion merger, however Frasers is known for acquiring strategic stakes in fashion businesses and also holds shares in Hugo Boss and Mulberry.

Of the potential sale of Missguided Shore Capital analyst Eleonora Dani said: “Shein’s prospective acquisition of Missguided signals intensifying competition in the UK online fashion market.

“For Missguided, which recently navigated financial distress only to be rescued from administration by Frasers Group, the transaction would serve as a liquidity event, providing an infusion of capital that enables brand stabilisation and growth under the umbrella of a globally recognised name.

“Additionally, the transaction accentuates the evolving international scope of the online fashion retail sector, further amplifying competitive pressures in an already saturated market.”

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