SHEIN, Forever 21 Partner in Fast-Fashion Deal
Fast-fashion competitors SHEIN and Forever 21 have joined forces. On Thursday, the retailers announced a deal that will bring together two brands that have a strong following of young shoppers and a reputation for trendy clothing and accessories at low prices. 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. Sparc is a joint venture that includes Authentic Brands Group, a brand management company with a portfolio of well-known retail names like Brooks Brothers, Lucky Brand, and Nine West; and Simon Property Group, the biggest shopping mall owner in the country.
Total Retail's Take: This partnership brings together two of the leading retailers in the fast-fashion category, and figures to further expand their reaches — albeit in different ways. While both retailers target a younger demographic, their primary channel of choice for doing so differs. Founded in China but now based in Singapore, SHEIN sells its merchandise online. Conversely, Forever 21 is mostly known for its mall-based stores here in the U.S. The partnership will allow SHEIN to penetrate further into the U.S. brick-and-mortar market, which it has tested to initial success through pop-up events in Dallas and Los Angeles. Meanwhile, Forever 21 gains access to SHEIN's massive online audience — 150 million users — to sell its appropriately targeted merchandise. On the surface this deal seems to strengthen both companies; whether that materializes is yet to be known.
