Shein and Forever 21 Team Up in Fast-Fashion Deal
Shein, the e-commerce giant known for ultralow prices, frequently refreshed stock and questions about working conditions in its supply chain, could sell within Forever 21 stores.
Published August 24, 2023
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.
As part of the agreement, Shein could one day operate stores-within-stores at Forever 21 outlets, while Forever 21’s clothes would be sold on Shein’s site. The deal also includes investments from each partner in shares of the other.
In the early 2000s, Forever 21 helped popularize the concept of fast fashion to American shoppers, standing out in malls with a revolving carousel of $5 tops and $10 dresses that hit racks more quickly than traditional department store schedules.
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.
Shein will acquire about one-third of the shares of Sparc Group, which has owned Forever 21 since the retailer emerged from bankruptcy in 2020. Sparc is a joint venture between the conglomerate Authentic Brands Group and the mall operator Simon Property Group. As part of the deal, Sparc, whose portfolio also includes Brooks Brothers and Eddie Bauer, will become a minority shareholder in Shein.
“We look forward to finding new ways to delight our customers through the potential of this partnership,” Donald Tang, Shein’s executive director, said in a statement.
Shein is a formidable force, said Jessica Ramirez, a retail analyst at Jane Hali & Associates. But Forever 21 has something that Shein doesn’t: a large portfolio of stores.
“As much as you don’t want to have too much brick and mortar,” Ms. Ramirez said, physical locations give customers an opportunity to interact more meaningfully with a brand’s products. For now, Shein’s business is driven by “how convenient it is and how cheap it is and how many styles that are on trend that they are able to offer.”
Shein has faced criticism for how and where it produces its products, and has been accused of using forced labor and copying independent designers’ work.
The company has denied using forced labor and cotton from the Xinjiang region of China. The U.S. government has banned imports from the region based on concerns about human rights abuses against Uyghurs, a predominantly Muslim group. Shein recently formed a program for independent designers in which it pays them to make apparel and goods for the company.
In June, Shein faced a public relations fiasco for sending a group of influencers on a trip to some of its factories in China. The influencers faced blowback on social media after posting that they did not see any issues with working conditions at the factories, a recurring source of controversy swirling around the company.
Forever 21 has faced challenges of its own. In 2019, it filed for bankruptcy and closed more than 30 percent of its stores in the United States as shoppers strayed from malls. It faced increased competition from both brick-and-mortar peers and digitally savvy competitors like H&M, Zara, Fashion Nova and, of course, Shein.