Will SPARC and SHEIN’s Partnership Create a Fashion Juggernaut?

SPARC Group and SHEIN have entered a partnership that aims to expand Forever 21’s presence online while giving SHEIN a testing ground for brick-and-mortar sales through store-in-store locations at Forever 21 shops. The agreement also included SHEIN taking a one-third interest in SPARC and SPARC becoming a minority shareholder in SHEIN.

Both retailers are aiming to synergize their respective brands to take advantage of each company’s strengths. Longer-term plans for the partnership include accelerating product innovation, exploring new business strategies, enhancing the customer experience, and growing both SHEIN’s and Forever 21’s presence on the market.

While the companies have not shared the exact details of their partnership, they noted that the deal is expected to expand distribution of Forever 21 products through SHEIN’s global e-commerce platform, which reaches 150 million users. Additionally, the companies will “test SHEIN customer-focused experiences” in Forever 21 locations, which will include initiatives beyond the previously mentioned store-in-store shops.

A place in the digital marketplace could offer insights for Forever 21 as well, now that SHEIN has expanded its integrated global marketplace to the U.S. SHEIN Marketplace gives sellers real-time insights and helps them learn about SHEIN’s on-demand production and demand measurement capabilities, which Forever 21 could leverage to improve its own operations.

These insights could also be passed onto fashion brands beyond Forever 21. SPARC, which is a joint venture between Authentic Brands Group and Simon Property Group, is the parent company of fashion brands such as Eddie Bauer, Aeropostale, and Brooks Brothers. The addition of SHEIN’s e-commerce expertise could help these banners expand their digital audiences in an increasingly omnichannel world.

In return, a greater on-the-ground presence in the U.S. could help China-based SHEIN achieve its goal of reportedly doubling revenue to nearly $60 billion by 2025, according to Financial Times. The brand is already popular with younger U.S. consumers, making Forever 21 a perfect match to help the company reach shoppers who could potentially be interested in its products but haven’t been to its site.

SHEIN could use the boost. The share of U.S. Gen Z women considering making a purchase from the retailer fell from 54% in May 2022 to 39% in September 2022, according to Morning Consult Brand Intelligence. This may be due to backlash regarding lackluster ESG initiatives.

While both brands remain strong with younger consumers, Forever 21 and SHEIN have fallen from their peaks — but an omnichannel partnership may help them play off each other’s strengths to fuel future success.