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Shein Expands Collaboration with Forever 21 to Bolster Reputation and Reach Ahead of Potential IPO

Published: December 22, 2023
Author: Fashion Value Chain

E-commerce giant Shein is expanding its partnership with former U.S. rival Forever 21 as part of its strategy to improve its image and reputation, particularly in the lead-up to a potential IPO in 2024. The two retailers have announced the launch of a co-branded clothing line, building on a joint venture established earlier this year. Under this collaboration, Shein will be responsible for designing, manufacturing, and distributing co-branded Forever 21 apparel and accessories, with a primary focus on selling these products through Shein’s website.

The co-branded clothing line will include a wide range of items for both men and women, encompassing sportswear, activewear, and swimwear, offering customers a diverse selection. This development follows a deal struck between Shein and Sparc Group, which manages Forever 21, a couple of months earlier. In that agreement, Shein acquired a significant stake in Sparc Group, which is a joint venture involving brand management firm Authentic Brands Group and mall owner Simon Property Group. In return, Sparc took a minority stake in Shein. The key advantage of this partnership has been Shein’s ability to display and sell its affordably priced clothing in Forever 21’s retail stores, providing it with an opportunity to reach a wider audience.

Now, Forever 21, traditionally known for its mall-based retail presence, can leverage Shein’s digital expertise and large customer base to enhance its e-commerce capabilities and expand its online reach. The primary aim of this collaboration is to boost sales for both brands, but it also serves broader objectives.

For Shein, which is rumored to be considering a U.S. IPO, this partnership plays a significant role in addressing concerns related to its supply chain practices, allegations of forced labor use, the exploitation of U.S. tariff laws, and accusations of design theft from independent artists. It faces mounting pressure from lawmakers and regulators, especially concerning its ties to China, the country of its origin and the main location of its supply chain operations. The collaboration with Sparc provides Shein with a powerful ally, potentially helping legitimize the company’s practices in the eyes of U.S. regulators and addressing concerns from lawmakers.

On the other hand, Forever 21 stands to regain relevance, particularly with younger consumers who are more inclined to shop online than in malls. By partnering with Shein, the retailer can tap into its digital strengths and attract a demographic that aligns with its strategy. In the words of Jamie Salter, the founder and CEO of Authentic Brands Group, “Shein’s innovative approach to engaging with consumers gives them the ability to deliver trends at speed. With an evolving retail landscape, where digital interaction has become the cornerstone of e-commerce, Shein has led the way in redefining how brands connect with consumers. We are excited to partner with SHEIN, as this collaboration perfectly fits into our distribution strategy for the brand’s new key markets.”

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