Fast fashion retailers Shein and Forever 21 have announced a partnership agreement, with Shein acquiring approximately one-third interest in Sparc Group, the operator of Forever 21. As part of the deal, Sparc will also become a minority shareholder in Shein. The collaboration is expected to expand the distribution of Forever 21’s products on Shein’s global e-commerce platform, which boasts 150 million online users. Additionally, the partnership will provide an opportunity for Shein to test its product sales and returns in physical Forever 21 stores across the United States.
Forever 21 currently operates over 540 locations worldwide, both in physical stores and online. However, no financial details of the deal have been disclosed at this time. The Wall Street Journal was the first to report on the agreement between Shein and Sparc.
Sparc Group is a joint venture that includes Authentic Brands Group, a brand development company, and Simon Property Group, a shopping centre operator. In addition to Forever 21, Sparc is involved in the manufacturing and distribution of clothing for other brands such as Aeropostale, Eddie Bauer, and Reebook.
Both Shein and Forever 21 have faced criticism regarding the environmental impact of their fast fashion production and allegations of unethical labour practices. Shein, in particular, has been accused of copyright infringement earlier this year. Concerns have also been raised by politicians and advocacy groups about the companies’ supply chains.
In May, a bipartisan group of politicians urged the US Securities and Exchange Commission to halt Shein’s initial public offering until the company could verify that it does not use forced labour from the predominantly Muslim Uyghur population in China. Furthermore, a Congressional report published in June criticized Shein and another Chinese fashion retailer, Temu, as part of an ongoing investigation into products potentially made with forced labour in China. The committee had previously requested information from brands such as Nike and Adidas regarding their compliance with anti-forced labour laws.
Shein responded to the allegations by stating that the company complies with customs and import laws in the countries where it operates. It also emphasized its “zero tolerance” policy towards forced labour and its implementation of a robust system to ensure compliance with US law. It is worth noting that Shein, currently headquartered in Singapore, has been attempting to distance itself from China in recent years and does not sell goods within the country. The company also denies sourcing cotton from China.
The partnership between Shein and Forever 21 marks an interesting development in the fast fashion industry. As both companies navigate concerns regarding their environmental impact and labour practices, this collaboration could potentially lead to improvements in their operations and supply chains. Only time will tell how this partnership will unfold and whether it will address the criticisms faced by these retailers.
