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Shein Partners with Forever 21 Owner in Market Expansion Efforts
Updated: Jan 8
In a move to expand market reach, online fashion retailer Shein announced on Thursday it has partnered with SPARC Group, a joint venture between Forever 21 owner Authentic Brands and mall operator Simon Property.
The deal, giving Shein roughly a one-third interest in SPARC Group, expands Forever 21's reach by bringing the label to Shein's online platform, serving about 150 million users. The partnership also presents an opportunity for Singapore-based, China-founded Shein to step into Forever 21's retail locations across the United States.
Under the agreement, SPARC Group would also become a minority shareholder in Shein. The company did not disclose the terms of the deal.
Forever 21's partnership with Shein follows a June move by shoe brand Skechers to join its marketplace, allowing shoppers to buy merchandise from third-party sellers on Shein's platform. Shein launched its US marketplace in May, a month after offering an identical service in Brazil.
Liza Amlani, founder of consultancy Retail Strategy Group, said despite the ethical, environmental and political criticism Shein faces, the company is a prime target for business partners wanting more eyes on their brands.
Shein's Forever 21 deal will help reach beyond its core ultra-fast fashion, primarily Generation Z, customer base, Amlani said. "A stake in SPARC would allow Shein to gather insights and merchandising strategies in launching a physical footprint," she added.
As of now, Shein has no plans to launch physical locations in the US, a company spokesperson said last week. The company did not immediately comment on plans to open physical stores in other regions like Europe and South America.
The company continues marketing its brand through pop-up stores in the US and elsewhere.
The Forever 21 deal will also enable the fast-fashion retailer to test in-person experiences including "shop-in-shops" and allow customers to return merchandise in physical stores. Shein currently deducts a £6.99 shipping fee from customers' refunds when returning more than one package from a single order.
Shein partners with Forever 21 owner to expand market reach
Deal gives Shein minority stake in SPARC Group, Forever 21 parent company
Allows Shein to access Forever 21's US retail locations and customer base
Follows Skechers partnership with Shein marketplace in expansion efforts
Source: Nikkei Asia