Shein and Forever 21 Forge Fast-Fashion Alliance

Chinese fast-fashion giant Shein has launched a partnership with American clothing retailer Forever 21.

The collaboration, as detailed in a Thursday (Aug. 24) announcement, would allow Shein to sell Forever 21 items on its site and eventually operate Shein shops inside Forever 21 locations.

Shein will acquire one-third of Sparc Group, Forever 21’s operator. Sparc — owned jointly by Authentic Brands and Simon Property Group — meanwhile, will purchase a minority stake in Shein, valued at $66 billion recently.

In a statement emailed to PYMNTS, Shein’s Executive Chairman Donald Tang said the eCommerce platform is “thrilled” with the partnership.

“We look forward to finding new ways to delight our customers through the potential of this partnership,” he said. “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.”

As for Forever 21, it gets a larger platform, thanks to Shein’s 150 million-person base of customers.

Jamie Salter, founder and chief executive of Authentic Brands, told the Wall Street Journal contacted Shein more than a year ago when he saw the company begin to push deeper into the fast-fashion space. Salter said the deal is based on the idea of maximizing distribution.

“Most of our customers are in physical stores,” he said. “Most of their customers are digital.”

Salter added the partnership could someday include other Sparc brands — the company’s portfolio also includes Reebok, Eddie Bauer and Aeropostale — “as Shein establishes itself more like an Amazon-type marketplace.”

As covered here earlier this year, Shein, in a bid to widen its U.S. customer audience, has been working to collaborate with smaller-scale American vendors, such as Los Angeles fashion footwear brand Cape Robbin. The company aims to prod customers into exploring a greater range of offerings beyond clothing.

This strategy is further underscored by the opening of temporary stores, a measure of Shein’s commitment to growing its presence and diversifying its customer base in the U.S.

“The marketplace platform makes available a range of additional merchandise and shipping options, and we expect it to result in increased customer engagement and satisfaction,” the company said in December.

As PYMNTS wrote, the move by the company — and other retailers, like rival H&M — into third party-marketplaces is a sign of something larger occurring in the retail world.

“In recent years, there has been a trend among brands and retailers toward diversifying their offerings by launching third-party marketplaces or incorporating third-party brands into their portfolios,” that report said. “The strategy paves the way for customer acquisition and bolstering customer retention, particularly in the face of competition, inflation, and the impending resumption of student loan payments.”