Shein buys a third of the group that owns Forever 21 – 08/24/2023 – Market

Shein, the largest online fashion retailer, announced on Thursday (24) the purchase of approximately one-third of the Sparc Holdings group, owner of the Forever 21 brand, which in turn becomes a minority shareholder in the Asian giant.

Forever 21 will have products distributed on Shein’s platform, which has 150 million users worldwide. On the other hand, Shein may open points inside Forever 21 stores in the United States.

Also owner of brands such as Nautica and Reebok, the Sparc group is a joint venture between the Authentic Brands groups and Simon Property. The company claims to have global sales of US$ 12.7 billion (R$ 62.2 billion).

Shein already has sales of around US$ 22 billion (R$ 108 billion) worldwide. In Brazil, the Asian already sells more than large national fashion retailers, such as Marisa. According to BTG bank estimates, the company earned no less than BRL 7 billion last year – a 250% jump over the BRL 2 billion recorded in 2021. The brand has just launched its first collection produced in the country.

“The powerful combination of Simon’s leadership in physical retail, Authentic’s brand development expertise and Shein’s on-demand model will help us drive scalable growth and together make fashion more accessible to all,” said Donald Tang , chief executive of Shein, in a statement.

Authentic Brands bought the Forever 21 brand after it filed for bankruptcy in the United States in September 2019. At the time, the retailer, founded in 1984 in Los Angeles (USA) by South Korean couple Do Won and Jin Sook Chang , had more than 800 stores worldwide.

There was a series closure of several points of sale, including in Brazil. The brand left the country in June last year, where it had 15 stores. But it continued with a partnership with Dafiti, an online fashion retail group.

Forever 21 appealed to young people by selling clothing similar to the big brands at affordable prices. But, according to analysts, the company failed at the time to react to the advance of online sales, and did not pay attention to the change in attitude of consumers, concerned about the environmental impact of ‘fast fashion’ chains and the working conditions offered to clothing employees. .

“With its e-commerce expertise and global reach, Shein offers the Sparc Group a platform to further leverage the growth of the joint venture’s brands. The partnership also hopes to expand the reach of Forever 21, the Sparc Group’s brand , bringing even more product variety to Shein customers,” the statement reads.

According to the text, the companies plan to use their platforms to “accelerate product innovation, explore new business strategies, improve user experience and enhance the presence of brands in the market.”