Frasers Group, owned by prominent businessman Mike Ashley, is now negotiating to sell its Missguided apparel brand to the online fashion behemoth Shein.
After the online clothing shop Missguided went bankrupt and into administration a year ago, Frasers Group paid £20 million (about $25 million) to acquire the business.
It had barely been a year after Frasers acquired ownership of the brand when Sky News first revealed rumors of a potential transaction. Reportedly, a deal would likely result in Shein acquiring Missguided's brand and other intellectual property, while Frasers will be allowed to keep the company's head office.
Frasers Saving Missguided From Financial Ruin
Nitin Passi established Missguided in 2009. Since then, it has grown to become one of the most successful and well-known online fashion retailers in the UK.
However, in May 2022, the company collapsed under the weight of supply chain issues, increased freight prices, and intensifying competition from other businesses, according to BBC. It was later acquired by Frasers Group.
The quick expansion of Frasers, which owns the Sports Direct chain that Ashley established, may be attributed to the company's strategy of purchasing struggling companies. This includes Game, Evans Cycles, Jack Wills, and Sofa.com, among others.
Ashley has a controlling share in Frasers even though he is no longer the company's chief executive officer.
Shein During COVID-19 Era and Amid Forced Labor Rumors
Shein is a behemoth of a company in the field of quick fashion and was established in China in the year 2008. Its headquarters are currently located in Singapore.
During the COVID-19 pandemic, when lockdowns led to an increase in internet buying, Shein's sales witnessed a significant increase.
BBC said it was valued at around $66 billion earlier this year, which was lower than a prior estimate of around $100 billion.
There has been a lot of speculation that Shein is going to try to list its shares in the US. But in May, a group of US congressmen demanded that Shein be investigated amid allegations that individuals from China's largely Muslim Uyghur community were used as forced labor to create some of the clothes that it sells. These allegations concern the production of some items by Shein.
Human rights organizations and governments from the West, especially the US and the UK, have accused China of perpetrating crimes against humanity against the Uyghur people.
In reaction to this, Shein made the following statement: "We have zero tolerance for forced [labor]. Our suppliers must adhere to a strict code of conduct that is aligned to the International Labour Organization's core conventions."
