Online fashion giant Shein has formed a strategic alliance with SPARC Group, a collaboration between Authentic Brands and Simon Property, in a move aimed at expanding their market presence. Through this partnership, Shein will secure a stake of around one-third in SPARC Group, allowing for the incorporation of Forever 21’s brand onto Shein’s online platform, which boasts a user base of approximately 150 million. Furthermore, the collaboration presents an opportunity for Shein, based in Singapore and founded in China, to explore entry into the physical retail locations of Forever 21 across the United States.
Details of the agreement, including financial terms, have not been publicly disclosed.
This initiative follows Shein’s recent inclusion of shoe brand Skechers in its marketplace, which enables customers to buy products from third-party vendors. Shein introduced its U.S. marketplace in May, mirroring a service launched in Brazil the preceding month.
Despite facing criticisms surrounding various aspects, including ethical concerns, environmental practices, and political factors, Shein remains an attractive partner for businesses due to its substantial consumer base. Collaborating with Forever 21 is expected to facilitate Shein’s expansion beyond its core consumer group of Generation Z individuals with a penchant for ultra-fast fashion. Industry experts suggest that Shein’s engagement with SPARC could provide invaluable insights and strategies for branching into the physical retail sector, possibly incorporating concepts like shop-in-shop experiences.
While Shein’s immediate plans do not involve establishing physical outlets in the U.S., the company’s expansion strategy for regions like Europe and South America remains uncertain. The partnership with Forever 21 will also enable Shein to introduce physical return locations, potentially eliminating the current shipping fee deduction for customers returning multiple packages.