Fast-fashion competitors Shein and Forever 21 have joined forces.
On Thursday, the retailers announced a deal that will bring together two brands that have a strong following of young shoppers and a reputation for trendy clothing and accessories at a low price.
As part of the joint venture, Shein will acquire about a third of Forever 21’s operator, Sparc Group. Sparc will also take a minority stake in Shein.
Financial details and terms of the deal were not disclosed.
While the companies have similar shoppers, they have catered to those customers in different ways. Shein, founded in China and based in Singapore, sells its merchandise online. The U.S.-based Forever 21 is mostly known for its mall stores.
By teaming up, Shein and Forever 21 will have new ways to reach customers. Some of Forever 21’s dresses, shoes and other merchandise will be available through Shein. The online retailer has 150 million users, Shein said.
For Shein, the deal will give the company a larger presence in U.S. malls, where its current customers and potential new customers shop. The company plans to test new approaches, such as shop-in-shops and allowing customers to make return in stores, according to a news release.
The agreement was first reported by the Wall Street Journal.
CNBC’s Gabrielle Fonrouge contributed to this report.
This story is developing. Please check back for updates.
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