By Laura McGuire
Rather than being criticised in the news, Shein has made the headlines this week for its rumoured interest in buying the Missguided brand from Frasers.
If the deal goes ahead to buy Missguided’s intellectual property, it would mark Shein’s first acquisition of a British fashion brand.
The estimated value of the deal is remains unknown at this stage.
As for Frasers Group, its decision to offload Missguided is an interesting move for the business, which has spent the last year building stakes and acquiring various retail businesses, including Boohoo, which it hiked to 9.1 per cent last month.
The Mike Ashley-owned business only bought the Manchester retail brand late last year for £20m, saving it from collapse.
Like Shein, the company has been barely shaken by the cost of living squeeze reporting a 15.8 per cent surge in revenues in the last financial year, totalling £5.56bn.
“The deal potentially marks a change in strategy for Frasers Group, which has been highly acquisitive in recent years. Perhaps it is now planning to divest some of its non-core assets when the price is right,” Victoria Scholar, head of investment at interactive investor, said.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, added: “Depending on how this deal is structured, it could open up possibilities of a future partnership with Shein.”
But a partnership with Shein wouldn’t come without reputational risks for Frasers, Streeter added. Shein have been heavily criticised over their rock bottom price tags and challenged over the environmental impact of its ultra fast fashion model. There have also been reported alleged human rights violations at Shein too – claims that it denies.
The fact that its three day pop up store on Oxford Street to celebrate London Fashion Week attracted protests, might prove a warning signal to Frasers that a sale, rather than a partnership, might be the best way forward to avoid potential future criticism.
