Shein and Forever 21 strike deal to cash in on fast-fashion fever
Fast-fashion retailers Shein and Forever 21 have ditched their rivalry for a mutually-beneficial deal to expand their market reach, the companies announced Thursday.
The deal — which would give Shein a roughly one-third interest in SPARC Group, a joint venture between Forever 21 owner Authentic Brands and mall operator Simon Property — expands the LA-based company’s reach by bringing the label to Shein’s online platform, which serves about 150 million users.
The partnership also presents an opportunity for Singapore-based and China-founded Shein to step into Forever 21’s retail locations across the United States.
SPARC, meanwhile, scooped up a minority stake in Shein, which was valued at $66 billion in May after gaining traction through social media for selling dresses, sweaters, shoes and even home appliances, garden supplies and pet accessories for single-digit prices.
“The financial details of the deal are not public,” a spokesperson for SPARC told The Post.
After SPARC produces Forever 21-branded apparel, it will then be sold to Shein and made available on Shein’s website and mobile app, according to The Wall Street Journal.
“The partnership offers the opportunity to test Shein customer-focused experiences in Forever 21 locations across the US including shop-in-shops, enabling return to store and other initiatives,” the press release said.
SPARC was unclear about whether any of Forever 21’s 540 stores worldwide would carry Shein’s low-priced products.
Shein has been a strictly online marketplace since it was founded in China in 2008, only hosting a handful of pop-ups globally in the past few years.
It surged in popularity during the pandemic when many customers were looking to shop online while adhering to a strict budget and turned to Shein’s items — many of which are under $10.
The company rocketed to the top of the digital fashion retailer list, recording a whopping $22.7 billion in sales and $700 million in profits in 2022.
However, Shein has since gained notoriety for producing its items in factory conditions that have been billed as abusive — especially after a series of TikTok videos showing clothing tags stitched with “help me” and “need your help” went viral.
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 who want more eyes on their brands.
Additionally, Shein’s 2021 Sustainability and Social Impact Report cited “frequent violations” throughout the supply chain after 700 suppliers were audited.
Of those surveyed, the most (27%) noted violations to the company’s “fire and emergency preparedness” and “working hours” (14%).
Meanwhile, 8% cited errors in “general working environment” and less than 1% even noted “underage labor.”
CBC Media Centre also reported in 2021 that out of a sample of 38 pieces of children’s, adult’s and maternity clothes and accessories, one in five items had elevated levels of lead, PFAS and phthalates, which are used in plastics.
