Shein acquired a stake in rival fast fashion retailer Forever 21 to expand its online offerings and establish a brick-and-mortar presence in the US.
The Singapore-based retailer, which already generates a large portion of its sales in the US, is trying to shift to an Amazon-style marketplace where sellers can list their own products alongside those manufactured by Shein.
Forever 21 products will be available to Shein’s 150 million online customers, according to a statement.
Closely held Shein, which has been considering going public according to reports, will also have the option to test in-person shopping experiences at Forever 21 locations in the US.
The Asian retailer has built a business worth US$66bil (approximately RM306bil) almost entirely online.
In the deal, Shein acquired about one-third of Sparc Group, which owns Forever 21 through a joint venture that includes Authentic Brands Group Inc and Simon Property Group Inc.
In return, Sparc Group became a minority shareholder in Shein. Specific financial figures weren’t disclosed.
"The powerful combination of Simon’s leadership in physical retail, Authentic’s brand development expertise, and Shein’s on-demand model will help us drive scalable growth and together make fashion more accessible to all,” Shein’s executive chairman Donald Tang said in a statement.
Shein, which sells some of its fashion products for less than US$5 (RM23), has quickly risen to prominence in the ultra-low-priced apparel market, unseating brands like Forever 21 and Charlotte Russe that were popular in the early 2000s.
The retailer, which produces the majority of its products in China, has faced scrutiny in the US as lawmakers question its opaque supply chain and use of forced labour.
There are also ongoing concerns about its carbon emissions due to the sheer volume of low-cost clothing, often made from polyester, that it produces annually.
Forever 21, which had 800 stores at its peak and relied on a mall-based strategy, struggled as more shopping moved online.
It was acquired out of bankruptcy in 2020 by a consortium of brands including Simon Property and Authentic.
The partnership with Shein could be a way for it to expand its online reach and get its name in front of Gen Z shoppers, who are Shein’s most loyal customers. – Bloomberg