Two fast-fashion giants, Shein and Forever 21, announced a "strategic partnership" on Thursday. As first reported by the Wall Street Journal, Shein will acquire one-third interest in Sparc Group, which owns Forever21; Sparc Group, in turn, will become a minority shareholder in Shein.
According to a joint press release, the deal will allow each retailer to test new sales approaches. Shein wants to expand its reach in the U.S., as well as its in-person retail footprint; through this partnership, it'll be able to pilot sales and returns of its inventory in Forever 21 stores across the country. Forever21, meanwhile, will make select merchandise available to shop on shein.com, opening it up to a broader international consumer base (beyond its over 540 existing global retail locations).
Aside from where you might be able to find (and buy and return) what, there's not an immediate effect on product. However, according to the Wall Street Journal, because Sparc will continue to handle production for Forever21 and sell to Shein for online distribution, it could pave the way for the brand to cut prices even more. (A plain white tank top on Shein costs $4.99, while a comparable style at Forever 21 costs $10.49.)
Despite consistent controversy and run-ins with the law, Shein claims its app has reached 150 million online users, and reportedly reached $23 billion in revenue in 2022. Forever 21's revenue that same year peaked at $4 billion — two years after being bought out of bankruptcy by Simon Property Groups, Brookfield Property Partners and Authentic Brands Group.(Sparc is a joint venture between Simon and Authentic, and owns a series of brands including Forever21.)
Both companies have also faced criticism for the environmental impact caused by their mass production (Shein alone releases 1,000 pieces of new apparel each day), as well as the exploitative labor practices employed to keep prices low.