CONTRIBUTING WRITER – NATALIA BUSTAMANTE
ORIGINALLY PUBLISHED ON OCT 25 2023
The rapid rise of fast fashion has taken the world by storm. In an effort to further infiltrate American wardrobes, two of today’s most prominent fashion brands, Shein and Forever 21, have decided to join forces with the parent company of Forever 21.
This collaboration will unite two of the biggest companies in fast fashion across the nation. Under the terms of the agreement, there is potential for Shein to establish dedicated sections within Forever 21 stores, and vice-versa. Additionally, both partners will make mutual investments in each other’s shares. Junior business major, Ana Gabriela Acosta expressed her opinions regarding this partnership from a business perspective. “From an economic standpoint, I see this as a mutually beneficial opportunity. It allows Shein to diversify their sales beyond online stores to include physical locations. This, in turn, offers customers a more engaging experience where they can try on clothes before making a purchase.”
To provide some background, Shein is set to procure approximately one-third of Sparc Group’s shares, the entity that has held ownership of Forever 21 since its emergence from bankruptcy in the year 2020. Sparc Group is a collaborative endeavor between the conglomerates Authentic Brands Group and Simon Property Group, a major mall operator. Acosta went on to discuss how Forever 21 has faced challenges in maintaining their business, leading to numerous store closures in the United States. She speculated, “I believe this partnership could be a significant step towards revitalizing Forever 21’s presence back in business.” As a component of this arrangement, Sparc Group will transition into a minority stakeholder in Shein. Professor of marketing, Dr. Nicole Kirpalani expressed her opinions on this new partnership: “The Forever 21/Shein joint venture provides growth opportunities for both brands. Forever 21 will be able to significantly boost its online presence, while Shein will have closer access to its younger target markets by selling its products in brick-and-mortar stores.
However, the fast-fashion business model that both brands employ leads to a negative impact on the environment. Steps towards more sustainable manufacturing, distribution, and products need to be taken.” In the early 2000s, Forever 21 played a pivotal role in popularizing the fast fashion concept among American shoppers. The company distinguished itself in malls by selling tops for as low as $5 and adopted a production schedule that outpaced traditional department stores. Established in 2012 and headquartered in Singapore, Shein has risen to prominence among American consumers in recent times by elevating the fast-fashion experience. The company leveraged its advanced technology and efficient supply chain to produce hundreds of new styles within weeks. This dynamic approach provides a diverse array of options to customers and caters to the evolving tastes of teenagers. The Shein website had become notorious for their extremely low prices resulting in various temporary pop-up stores in the United States.
Shein has encountered scrutiny regarding the production methods and locations of its inventory, with allegations of forced labor and plagiarizing independent designers’ creations. Acosta voiced her reservations about this partnership: “Partnerships can be tricky if not properly structured. I trust that both parties have a solid agreement in place that paves the way for success for both entitles.” The U.S. government has banned imports from regions of concern, due to concerns about human rights violations against the Uyghurs, a predominantly Muslim ethnic group. Shein vehemently denies engaging in forced labor practices. To address these accusations, Shein did also institute a program for independent designers, compensating them for crafting apparel and goods for the company, however this may be to little too late.
Forever 21 encountered significant hurdles of its own. In 2019, the company filed for bankruptcy and shut down over 30% of its U.S. stores due to a shift in consumer behavior against purchasing in physical stores and mounting competition from similar stores such as Shein, H&M and Zara.