Fast-fashion retailers Shein and Forever 21 are partnering up.
The partnership allows Forever 21 to sell merchandise on Shein's site, and Shein products could be sold in Forever 21 stores.
The move expands Shein's efforts to build its marketplace offerings beyond Shein-manufactured clothing.
Shein, the Asian e-commerce behemoth, is joining fast-fashion forces with Forever 21.
The two retailers have partnered up to sell each other's merchandise, The Wall Street Journal first reported. The partnership will allow Shein to sell Forever 21 products on its website, and Forever 21 to add Shein sections in-stores, where customers could also return Shein items.
The move furthers Shein's efforts to expand its offerings so it's "less reliant on ultra-cheap apparel," retail analyst Neil Saunders, managing director of GlobalData, told Insider over email.
In recent months, Shein has added third-party retailers to its site. It sells the third-party merchandise, such as home appliances and tech products, alongside its own clothing — positioning Shein to become an Amazon Marketplace of sorts.
"While Forever 21 isn't premium, it is a credible brand that adds more fashion heft to Shein's offer and may help attract some new consumers," Saunders wrote. "Shein will also hope that the addition of a well-known American name will help to lessen focus on its manufacturing practices, which have come under scrutiny."
Despite facing criticism for its manufacturing practices, Shein has grown to become one of the largest fast-fashion retailers in the U.S. The partnership could give Forever 21 exposure to a significant number of new consumers across the US and the globe, Saunders wrote. Shein's website reaches 150 million users, according to the company.
"Although both companies stand to make gains, Shein has an advantage as it is operating from a position of strength and is already taking share away from Forever 21, and others," Saunders wrote. "Comparatively, this is something of an admission by Forever 21 that it is not able to engineer growth in its own business in the way that it would like. There is an element of 'if you can't beat them, join them' in Forever 21's thinking."
Sparc Group, a joint venture of Authentic Brands Group and Simon Property Group, operates Forever 21. Authentic, Simon, and Brookfield Property Partners bought Forever 21 out of bankruptcy in 2020. The retailer has more than 540 locations globally.
This deal with Forever 21 could set Shein up for future partnerships with other retailers, WSJ reported. In addition to Forever 21, Sparc's portfolio includes fashion retailers Lucky Brand and Aéropostale; athletics brand Reebok; and lifestyle and outdoor brands, including Eddie Bauer, Brooks Brothers, and Nautica.
"As Shein has taken a stake in the parent of Forever 21, the eventual game plan might be for the eventual takeover of the brand," Saunders wrote.
Shein and Sparc Group declined Insider's requests for further comment on the deal.
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