Reporter | Chen Qirui
Edit | Lou Shuqin
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According to BoF Fashion Business Review, Chinese cross-border fashion e-commerce shein may be interested in bidding for British fast fashion brand Missguided, and other potential buyers include apparel retailers Asos, JD Sports and private equity funds CVC Capital Partners and Carlyle Group.
Founded in Manchester in 2009, Missguided is an online-based fast fashion brand that started out selling wholesalers ready-to-wear, and then gradually built up its own design team and supply chain system. Misguided is currently sold in several countries in Europe and the Americas, with the Uk and the US being the two largest markets.
In the 12 months to March 2021, Missguided generated sales of £287 million. However, due to the impact of the epidemic, Missguided's supply chain stability and inventory problems are prominent. Brands such as Zara and H&M have intensified market competition with a rapid recovery in the post-pandemic era, and ultra-fast fashion brands such as SHEIN and Fashionnova have also diverted some consumers at lower prices.
These reasons led Misguided to end up in business trouble. In 2021, Missguided chose to sell its 50% stake to private equity fund Alteri Investors for financial support. After founder and former CEO Nitin Passi left in April, marketing consultancy Teneo announced that it would take over Missguided's operations during the transition period and develop a new transformation plan.
The end result was the sale of Missguided. Business Sale Report, an online business outlet, said the deal could be completed as soon as May. Nitin Passi continues to hold positions on Missguided's board of directors as a representative of the family's equity.
Interface Fashion asked for confirmation of the bidding for Missguided, and SHEIN replied that the message was untrue.
This is not the first time SHEIN has been rumored to be acquired. Since its inception, SHEIN has expanded several times through acquisitions and investments.
SHEIN first started the acquisition around 2014. In November 2014, SHEIN acquired cross-border e-commerce Romwe for an unknown amount. Romwe was founded by Li Peng, who was a partner of SHEIN founder Xu Yangtian early Nanjing Dianwei Information Technology Co., Ltd.
The merger of Romwe brought new users and traffic to SHEIN, and also gave it a taste of acquisition. In the following years, SHEIN successively acquired similar cross-border e-commerce companies Makemechic and ZZKKO, as well as foreign trade retailer Guangzhou Longyiren Garment Co., Ltd., and Xu Yangtian also invested in the jewelry e-commerce platform SOUFEEL in his own name.
In 2020, the long-term low-key development of SHEIN entered the public eye, and many people compared SHEIN to the next Zara. Reuters reported that SHEIN's sales revenue in 2021 was about US$15.7 billion (about 99.3 billion yuan), while Zara's parent company Inditex had revenue of 27.7 billion euros (about 192 billion yuan) in the same year.
It was also during the same period that SHEIN became more and more high-profile.
In January 2021, SHEIN joined the British fast fashion brand Topshop for bidding, and then joined hands with Sequoia Capital China Fund to invest in outdoor home furnishing brand Outer. The company's other investment projects include Guangzhou Lanshen Technology Co., Ltd. and Shenzhen Qianhai Patuosun Network Technology Co., Ltd., both of which are related to cross-border e-commerce business.
It is not difficult to comb through the SHEIN investment map and find that most of the projects are oriented by technology or platform advantages, which helps to accelerate the development of supply production, logistics, data analysis and sales networks. Supply chain and data analysis system is SHEIN's strong point, low prices, capture fashion trends and quickly return to the new model of small orders, accumulating a large number of consumers for SHEIN.
In terms of brand building, SHEIN's advantages over Zara and H&M are not obvious.
This is why it has recently raised its profile by holding designer competitions and announcing sustainable sub-brands. The purpose of joining Topshop is similar. Topshop's reputation and higher selling prices are conducive to SHEIN's future transformation, and the existing retail network of stores can serve as a channel to bring influence from online to offline.
Missguided's overall competitiveness is not as good as Topshop, but that doesn't mean it's worthless. As a multinational fast fashion brand, Missguided can provide enough potential users. In terms of brand image construction, winning local fast fashion brands in Europe and the United States can promote the position of China's overseas e-commerce in the global fashion industry.
According to Bloomberg, SHEIN is recently seeking a new round of financing worth $1 billion.
At the pace of SHEIN's accelerated expansion, if the financing is successful, part of the money may be used for brand acquisitions. There is no end to low-cost and efficient competition, and when the technology matures, there will inevitably be more efficient new players to compete for the market. For long-term development, SHEIN must deepen brand barriers at other levels besides the supply chain.