On October 30, SHEIN announced its acquisition of the fast-fashion brand Missguided and all its intellectual property rights from the UK's Frasers Group. The financial details of the acquisition were not disclosed.
Sources revealed that Missguided, established in 2009, is one of the UK's largest online fashion retailers. In 2020, Missguided reported revenues of £300 million. Frasers Group, known for its series of retail acquisitions, also owns renowned fashion brands such as Sports Direct, House of Fraser, and Jack Wills.
According to the collaboration agreement between the two companies, Missguided's products will be produced by SHEIN's flexible supply chain and sold on the SHEIN platform.
Just two months ago, SPARC Group, the parent company of Forever 21, announced in August that SHEIN had acquired about a third of SPARC Group's equity.
Entering the second half of this year, SHEIN has been aggressively making acquisitions globally. The strategy appears to be aimed at building a stronger capital barrier and brand influence to mitigate fluctuations in SHEIN's business.
SHEIN's Overseas Expansion
This isn't SHEIN's first acquisition this year.
At the beginning of 2022, SHEIN had bid £300 million to acquire the UK clothing retail group Arcadia, which owns brands like Topshop, Topman, and Miss Selfridge. However, the final buyers were UK's leading fast-fashion e-commerce platforms, ASOS and Boohoo.
Following that, in August, SHEIN acquired a third of the equity of the American clothing brand operator, SPARC Group. In return, SPARC Group acquired a minor stake in SHEIN. SPARC Group owns several clothing brands, including fast-fashion women's brand Forever 21, outdoor brand Nautica, and mid-range men's brand Brook Brothers.
Recently, the global brand development, marketing, and entertainment platform, Authentic Brands Group (ABG), announced a long-term collaboration agreement with SHEIN for the Forever 21 brand. This strategic partnership with SHEIN will cover major men's and women's fashion and lifestyle categories.
In this collaboration, SHEIN will design, manufacture, and sell a range of Forever 21 branded clothing and accessory products, including casual sportswear and swimwear. The Forever 21 x SHEIN joint brand will utilize SHEIN's industry-leading flexible on-demand production model to effectively reduce inventory waste. SHEIN will also handle online sales of this product line in the US, parts of Europe, and the Australian market.
Industry insiders believe that combining the brand effects and influence of local well-known brands with SHEIN's industry-leading flexible supply chain and vast online market will generate stronger growth momentum. This deep strategic cooperation will open up vast development opportunities for both SHEIN and Forever 21.
Challenges and Controversies
While SHEIN is aggressively expanding overseas, its core business is experiencing significant market fluctuations.
Public data shows that in 2022, SHEIN's revenue reached $24 billion, a year-on-year increase of 52.8%, a decline from the 57% revenue growth rate in 2021. Profits were $700 million, down from $1.1 billion in 2021. This marks the first time SHEIN has experienced a decline in revenue growth and profits.
Furthermore, SHEIN has been named as a defendant in at least 50 trademark or copyright infringement lawsuits in the US over the past four years. Brands such as Nike, UGG under Deckers, Levi Strauss, streetwear brand Stussy, Oakley sunglasses under Luxottica Group, and online retailer Dolls Kill have all accused SHEIN of copying their product designs.
New Leadership to Navigate Challenges This year, while SHEIN's business remained stable, its investment side was aggressive, thanks to its new leadership.
Earlier this year, SHEIN founder Xu Yangtian brought in Marcelo Claure, former deputy to SoftBank's Masayoshi Son, and appointed him as the chairman of the company's Latin American region.
Claure is not just a corporate executive. He is the founder and CEO of the Claure Group, a multi-billion-dollar global investment company covering multiple high-growth areas, including technology, telecommunications, media, real estate, energy transition, and sports.
In January 2022, Claure left SoftBank after a nine-year tenure. Unexpectedly, he joined SHEIN with a $100 million investment.
Market observers believe that with Marcelo Claure's extensive connections and influence in the global tech investment world, he will support SHEIN's globalization strategy.
Now, less than a year into his tenure, SHEIN has made several significant moves in the investment sector, mirroring the pace at which SHEIN captured the European and American markets in the past.
If investments are meant to balance business fluctuations, then the acquisition of Missguided is likely not SHEIN's last move this year.
