News this week that Frasers Group was selling a brand rather than buying one (as is more often the case) may have surprised some, but it makes strong commercial sense on Shein’s part, an analyst has said.
Alice Price, Apparel Analyst at GlobalData, said Shein’s first purchase of a UK brand “will enable it to further assert its growing influence over the UK apparel market”.
The ultra-fast-fashion giant has seen its popularity skyrocket in recent years and Price added that its UK apparel market share is expected to jump 0.5ppts to 2.2% for the year, which means it will have a top 10 place for the first time.
The Gen Z destination has achieved success so far with very low prices and just about the fastest trend response of any fast-fashion name.
And while Frasers Group may have decided Missguided wasn’t the right fit for its own business, Price thinks Shein’s “superior financial resources and fashion expertise should allow it to steer [the brand] back to relevance by ensuring its ranges reflect the latest trends and strengthening its digital proposition, through enhanced navigation and product filters, to offer shoppers greater convenience”.
Not that Frasers’ sale of the label is the end of story as far as the group is concerned as it has retained the Missguided team of employees and Frasers CEO Michael Murray highlighted the potential for “further collaborations” between it and Shein in the future.
The analyst thinks that means a possible similar deal with Frasers as Shein struck with Forever 21 in the US in August. She also sees the potential for Shein’s ranges appearing in Frasers-owned stores across the UK.
She added: “With Shein also often criticised for its sub-par ethical standards, it is likely to be making deals with established local brands to bolster consumer perceptions. It is expected to continue making similar moves going forwards, with the purchase of struggling players at bargain prices barely making a dent on its prosperous balance sheet.”
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