Shein deepens its relationship with Forever 21, will begin selling co-branded clothes online

KEY POINTS

• Shein and Forever 21 are slated to unveil a co-branded clothing line that will be primarily sold on Shein's website.
• The companies launched a joint venture earlier this year that saw Shein take a stake in Forever 21's operator Sparc Group.
• The partnership serves larger goals for both companies that go beyond a sales boost.

Shoppers walks past advertisements on the opening day of fast-fashion e-commerce giant Shein, which hosted a brick-and-mortar pop up inside Forever 21 at the Ontario Mills Mall in Ontario on Oct. 19, 2023.

Allen J. Schaben | Los Angeles Times | Getty Images

Shein is deepening its relationship with a former U.S. rival as it aims to sanitize its reputation ahead of a possible IPO in 2024.

The e-commerce giant is slated to unveil a co-branded clothing line with Forever 21 after the two retailers launched a joint venture earlier this year, the companies announced on Friday. 

Under the partnership, Shein will design, manufacture and distribute a line of co-branded Forever 21 apparel and accessories that will be sold primarily on Shein's website. 

The line will span both men's and women's apparel and include new sportswear, activewear and swimwear, the companies said. 

The announcement comes about two months after Shein and Forever 21's operator Sparc Group inked a deal that saw both companies take a stake in each other's businesses. 

Under the agreement, Shein acquired about one-third of Sparc Group — a joint venture that includes brand management firm Authentic Brands Group and mall owner Simon Property Group — while Sparc took a minority stake in Shein. 

A line of shoppers get the first opportunity to shop on the opening day of fast fashion e-commerce giant Shein, which is hosting a brick-and-mortar pop up inside Forever 21 at the Ontario Mills Mall in Ontario Thursday, Oct. 19, 2023.

Allen J. Schaben | Los Angeles Times | Getty Images

The partnership has allowed Shein to sell its myriad low-priced apparel at Forever 21's retail stores, which has helped the company to meet a broader customer base and show off its wares in person. 

Now, Forever 21, which is mostly known for its mall stores, will be able to leverage Shein's digital prowess and massive customer base to boost its e-commerce capabilities and expand its online footprint.

While the partnership is designed to boost sales for both brands, it also serves larger goals. 

Shein, which is rumored to be exploring a U.S. IPO, has been working to sanitize its reputation and beat back accusations that it uses forced labor in its supply chain, exploits U.S. tariff law and steals designs from independent artists. It is facing increasing pressure from lawmakers and regulators, who also have concerns about Shein's ties to China, the country where it was founded and where its supply chain is primarily based. The company has highlighted various efforts it has made to remedy those issues.

In its partnership with Sparc, Shein doesn't just get its clothes in malls, it now has a powerful ally on its side, which could help legitimize the company in the eyes of U.S. regulators and work to assuage concerns from lawmakers. 

For Forever 21, its partnership with Shein helps the retailer to regain the relevancy it once had in the mid-2010s and win over younger customers who are more likely to shop online than they are in malls. 

"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," Jamie Salter, the founder and CEO of Authentic, said in a news release. "We are excited to partner with SHEIN, as this collaboration perfectly fits into our distribution strategy for the brand's new key markets."