Shein acquired a stake in rival fast-fashion retailer Forever 21, expanding its online offerings and establish a brick-and-mortar store presence in the U.S.
The Singapore-based retailer already generates a large portion of its sales in the U.S. It’s trying to shift to an Amazon-style marketplace where sellers can list their own products alongside those Shein manufactured. Forever 21 products will be available to Shein’s 150 million online customers, according to a statement.
Closely held Shein has been considering going public, according to reports. Shein will also have the option to test in-person shopping experiences at Forever 21 locations in the U.S. The Asian retailer has built a business worth $66 billion almost entirely online.
Shein Group Ltd. ranks No. 2 in theAsia Database. That’s Digital Commerce 360’s rankings of the largest online retailers in Asia by web sales. Forever 21 is No. 121 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers.
Shein expands further through Forever 21
In the deal, Shein acquired about one-third of Sparc Group, which owns Forever 21 through a joint venture. The venture also includes Authentic Brands Group Inc. and Simon Property Group Inc. In return, Sparc Group became a minority shareholder in Shein. Specific financial figures weren’t disclosed.
“The powerful combination of Simon’s leadership in physical retail, Authentic’s brand development expertise, and Shein’s on-demand model will help us drive scalable growth and together make fashion more accessible to all,” Shein’s executive chairman Donald Tang said in a statement.
Shein sells some of its fashion products for less than $5, helping it quickly rise to prominence in the ultra-low-priced apparel market. Shein has also unseated brands like Forever 21 and Charlotte Russe that were popular in the early 2000s.
The retailer, which produces the majority of its products in China, has faced scrutiny in the U.S. as lawmakers question its opaque supply chain and use of forced labor. There are also ongoing concerns about its carbon emissions due to the sheer volume of low-cost clothing, often made from polyester, that it produces annually.
Forever 21, which had 800 stores at its peak and relied on a mall-based strategy, struggled as more shopping moved online. It was acquired out ofbankruptcyin 2020 by a consortium of brands including Simon Property and Authentic. The partnership with Shein could be a way for it to expand its online reach and get its name in front of Gen Z shoppers, who are Shein’s most loyal customers.
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