By James Davey
LONDON (Reuters) -Shein, the China-founded fast-fashion retailer, has bought the Missguided brand from Mike Ashley's Frasers, the e-commerce giant's first purchase of a British brand.
Frasers said on Monday Shein would acquire the intellectual property and trademarks of Missguided, while Frasers would retain its real estate and employees which have now been integrated into Frasers' fashion division.
Financial details of the deal were not disclosed but Frasers said the transaction had enabled "exciting discussions" with Shein regarding opportunities for potential collaboration across its brand portfolio.
Frasers, formerly called Sports Direct (LON:FRAS), bought Missguided out of administration - a form of protection from creditors - for 20 million pounds ($24.2 million) in June 2022.
Shares in Frasers, 73% of which are owned by Sports Direct founder Mike Ashley, were up 1.6% in morning trading.
"This move is particularly noteworthy because it marks Shein's first acquisition of a British brand, aligning well with its focus on the UK as one of its fastest-growing markets," Shore Capital analyst Eleonora Dani said.
It will bring the Missguided label to Shein's online platform, which serves about 150 million users.
Frasers also owns the "I Saw it First" and "Missy Empire" brands in women's online fashion.
It said retaining the combined Frasers fashion teams while rationalising its portfolio in this space to focus on fewer brands made sense in the current climate.
"We are also excited about the ongoing discussions around further collaboration between Frasers Group and Shein," Frasers CEO Michael Murray said.
Shore Capital's Dani said the deal could be a precursor to leveraging Frasers' UK store portfolio, enabling Shein to bridge the gap between online and offline shopping.
"The joint venture we have entered ushers in a new format of partnerships for SHEIN," Donald Tang, executive chairman of Shein, said in a statement on Monday.
It is the latest step in Shein's push to bring other apparel brands onto its platform. On Friday, Shein announced a co-branded line of apparel and accessories with Forever 21 after entering a partnership in August with SPARC Group, a joint venture between Forever 21 owner Authentic Brands and mall operator Simon Property (NYSE:SPG), as it looked to expand in the United States.
Shein has moved its headquarters to Singapore but manufactures most of its products in China.
Reuters reported in July that Shein was working on a potential U.S. initial public offering and had been in talks with the New York Stock Exchange and Nasdaq.
Frasers also owns 19% and 16.5% stakes in online fashion retailers ASOS (LON:ASOS) and Boohoo (LON:BOOH) respectively.
($1 = 0.8271 pounds)