As part of the joint venture, Shein will acquire about a third of Forever 21′s operator, Sparc Group. Sparc will also take a minority stake in Shein.
Chinese e-commerce retailer Shein is teaming up with the parent of Forever 21 to expand its presence in the US.
Shein, the e-commerce retailer founded in China, is teaming up with the parent of Forever 21 to expand its reach into Americans’ closets. The tie-up will bring together two of the biggest names in the fast-fashion sector online and in malls across the country.
The deal, which would give Shein a roughly one-third interest in SPARC Group, expands Forever 21's reach by bringing the label to Shein's online platform. 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 is a joint venture between the conglomerate Authentic Brands Group and the mall operator Simon Property Group. As part of the deal, Sparc will become a minority shareholder in Shein.
Shein, founded in 2012 and now based in Singapore, has gained popularity among American shoppers in recent years by taking fast fashion to the next level. The company’s technology and supply chain allow for hundreds of new styles to be made in weeks, offering shoppers, especially teenagers and 20-somethings, more options tailored to every shift in taste.
Known for its ultralow prices, Shein says its app has 150 million users around the world. It has also experimented with pop-up shops in the United States before.
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, which allows shoppers to buy merchandise from third-party sellers on Shein's platform. Shein launched its U.S. marketplace in May, a month after offering an identical service in Brazil.
As of now, Shein has no plans to launch physical locations in the U.S. or other regions, a company spokesperson said on Thursday.
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 $7.99 shipping fee from customers' refunds when they return more than one package from a single order.
