Shein the e-commerce retailer founded in China is teaming up with the parent of Forever 21 and going into business together.
The tie-up between fast fashion retailers Shein and Forever 21 to expand its reach into Americans’ closets will bring together two of the biggest names in the fast-fashion sector online and in malls across the country.
Shein could one day operate stores-within-stores at Forever 21 outlets as part of the agreement,, while Forever 21’s clothes would be sold on Shein’s site while the deal also includes investments from each partner in shares of the other.
Forever 21 helped popularize the concept of fast fashion to American shoppers in the early 2000s, standing out in malls with a revolving carousel of $5 tops and $10 dresses that hit racks faster than traditional department store schedules.
Shein, which was founded in 2012 and is now based in Singapore, has gained popularity among American shoppers in recent years by taking fast fashion to the next level. Shein’s technology and supply chain allow for hundreds of new styles to be manufactured in weeks, offering shoppers, especially teenagers and 20-somethings, more options tailored to every shift in taste.
The Chinese-founded Shein the e-commerce giant known for ultralow prices, says its app has 150 million users around the world, and it has previously also experimented with pop-up shops in the United States.
Shein will acquire about one-third of Sparc Group, shares, which owned Forever 21 since the retailer emerged from bankruptcy in 2020. Sparc is a joint venture between the the mall operator Simon Property Group and Authentic Brands Group. As part of the deal, Sparc, whose portfolio also includes Brooks Brothers and Eddie Bauer, will become a minority shareholder in Shein under a partnership agreement announced on Thursday.
The deal is expected to expand the distribution of Forever 21 on Shein’s global e-commerce platform, which has attracted 150 million online users. The partnership in turn, also provides the opportunity to test Shein product sales and returns in physical Forever 21 stores across the U.S.A, the companies said in a joint release.
Forever 21 has over 540 locations globally and online. Financial details of the deal were not disclosed in the announcement. The Wall Street Journal initially reported the deal between Shein and Sparc on Thursday.
Donald Tang, Shein’s executive director, said in a statement that they look forward to finding new ways to delight customers through the potential of this partnership.
Jessica Ramirez, a retail analyst at Jane Hali & Associates said that Shein is a formidable force, but Forever 21 has a large portfolio of stores.
Ms. Ramirez said that physical locations give customers an opportunity to interact more meaningfully with a brand’s products. Shein’s business at present is driven by how convenient and cheap it is and how many styles on trend they are able to offer.
Both Shein and Forever 21 have faced strong criticism around the environmental impact of their fast fashion production and allegations of unethical labor practices. Earlier this year, Shein was notably accused of copyright infringement while there have been ongoing concerns among some lawmakers and advocacy groups about its supply chains.
Managing director of GlobalData Retail, Neil Saunders, says that the new partnership made sense for both parties, noting that Forever 21, which is still undergoing some struggles in the fast-fashion world, could see fast growth on Shein’s sizeable online platform.
Lawmakers have also been trying to crack down on a century-old trade rule — known as de minimis — that benefits both Shein and Temu. Under the provision, imported packages valued under $800 receive tax exemptions and less oversight from U.S. customs.
Shein, which is now headquarted in Singapore, has also tried to distance itself from China in recent years. According to The Journal, Shein doesn’t sell goods in China and denies sourcing cotton from the country.
Although both companies are expected to benefit from the newly-announced partnership, Saunders said Shein still has an advantage as it is operating from a position of strength and is already taking share away from Forever 21, and others. He said that this was something of an admission by Forever 21 that it was not able to engineer growth in its own business in the way that it would like and that there was an element of ‘if you can’t beat them, join them.’
