Shein inks deal with Forever 21 as it looks to boost its reach

Shein and Forever 21 have entered into a partnership that will give both brands new ways to reach customers, the retailers announced on Thursday. As part of the partnership, Shein will acquire around a third of Forever 21′s operator, Sparc Group. Sparc will also take a minority stake in Shein. The financial terms of the partnership were not disclosed.

The agreement was first reported by The Wall Street Journal.

The partnership will allow Shein to sell Forever 21 clothing and accessories on its site. Shein says the partnership gives it the opportunity to test customer-focused experiences at Forever 21 locations across the United States, including shop-in-shops and in-store returns.

With these new initiatives, the two retailers will be able to expand their reach. Although both Shein and Forever 21 are known for affordable fast fashion, they cater to customers in different ways. For instance, while Shein sells its items online, Forever 21 is known for its physical locations. By leveraging each other's networks, the companies will be able reach customers in more ways.

It's worth noting that Shein has already experimented with in-store shopping, as the company has held limited-time pop-up shops in cities like New York City, Cincinnati and Los Angeles.

"We are excited for the partnership with Shein as it reflects our shared vision of providing customers with unparalleled access to fashion at affordable prices," said Sparc Group CEO Marc Miller in a statement. "By working together, we will provide even more innovative and trendsetting products to fashion enthusiasts around the world."

It's worth noting that Sparc is a joint venture that includes Authentic Brands Group, a brand management company with a portfolio of notable names like Brooks Brothers, Lucky Brand and Nine West. Its portfolio also includes Simon Property Group, which is the biggest shopping mall owner in the United States.

The partnership comes as Shein has faced criticism over the environmental impact of its fast-fashion practices. Congress has also pressed the company to certify to the SEC that its products that are made in China do not utilize forced Uyghur labor.

Shein recently invited a select number of influencers to tour one of its factories in Guangzhou, China, to portray a scene that was the opposite of the brand's long-running allegations. Shein's vision for the trip backfired, as users saw that it was a highly curated brand trip where influencers were offered free travel opportunities and gifts, encouraging them to promote a favorable image of the company.

Despite the environmental and labor concerns, Shein is extremely popular on apps like TikTok, YouTube and Instagram, where people and creators show off all the clothes they got at cheap prices.

Shein has tried to distance itself from China, as U.S. lawmakers continue to scrutinize companies with ties to the Asian country, including TikTok. To distance itself from the country, Shein moved its headquarters in 2021 to Singapore. The company also does not sell its products in China, despite being founded there in 2012.