AUTHENTIC brands has been extremely busy making deals with retailers from the past and now has announced a gigantic deal between Shein and Forever 21. Authentic has built a $30 billion business that owns some 50 of the world’s best-known brands. This new arrangement with Shein, the global online fashion and lifestyle retailer, for its Forever 21 brand will have Shein design, manufacture and distribute a line of Forever 21 apparel and accessories. The collection will be sold exclusively online on Shein’s sites in the US as well as part of Europe and Australia.
THIS deal comes shortly after the news that Shein had acquired about a third interest in SPARC Group, a joint venture between Authentic and Simon Property Group. SPARC is the core operating partner of Forever 21 in the US, At the same time, SPARC became a minority shareholder in Shein.
WHILE the Forever 21 deal is seen as a potentially highly lucrative one, it is the start of something even larger. This is the start of building brands within an e-commerce platform.
FORVER 21 already operates a fleet of physical stores and has an online presence but this deal will bring the company onto the Shein platform, which boasts over 154 million users, There is amazing market penetration that will be achieved by this move.
ALTHOUGH the deal is for online, it will be more far reaching because of Shein’s investment in SPARC. Shein installed a pop-up shop in the Forever 21 location in Ontario Mills in Ontario, CA and saw over 7,000 people walking through the space in it’s four-day stay, with comparable store sales up 62 percent over the prior year. To be sure, there will be more pop-ups and we will see many more old brands renew themselves in the near future.