Asian eCommerce giant Shein is teaming up with fashion retailer Forever 21. Shein is known for its extremely affordable apparel and commands a significant share of the U.S. fast-fashion market. With this partnership, the company will offer Forever 21’s products on its website and could eventually have a presence in Forever 21’s retail outlets.
This move marks a key milestone in Shein’s efforts to be more than just an affordability play. It is acquiring about one-third of Sparc Group, the operator of Forever 21. In turn, Sparc is picking up a minority stake in Shein. Sparc is a joint venture between Simon Property Group (NYSE:SPG) and Authentic Brands. Sparc produces and distributes products for major brands, including Nautica, Lucky Brand, and Reebok.
While the deal provides Forever 21 with access to nearly 150 million Shein customers, the latter also gains third-party brands as Shein gradually entrenches itself as the major marketplace in fashion. Indeed, earlier this year, the company introduced a marketplace for third-party goods.
While Shein was valued at $66 billion in a recent funding round, Authentic Brands was valued at $12.7 billion after raising funds from two private equity names.
Meanwhile, after ticking 5.2% higher over the past year, Simon Property Group is trading at a market capitalization of roughly $41.77 billion. Overall, the Street has a consensus price target of $128.22 on SPG, alongside a Moderate Buy consensus rating.
Read full Disclosure