Jamie Salter, the CEO of Authentic, recently opened up about Forever 21's partnership with Shein.
He recently spoke about collaborations in the retail sector and a significant decision he wishes hadn't been made.
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CEO Salter Discusses Forever 21 and Shein Alliance
During a presentation at ICR on Monday, he revealed that acquiring Forever 21, which Authentic mall operators Simon and Brookfield purchased from bankruptcy in 2020, was "probably the biggest mistake I made."
However, he sees the Shein partnership as a potential turnaround.
Salter admitted he overlooked the impact of Shein and Temu when buying Forever 21. A decision met with skepticism by his board. "My partner, Mr. Simon, questioned our partnership with Shein,"
Salter said. "But I explained that it's the right move. We can't outpace them; their supply chain and market understanding are too strong. Partnering is our best strategy."
The results of selling Forever 21 products on Shein's website have been decent but not outstanding. However, Salter pointed out other promising aspects of the partnership.
"The last four months with Shein have been a learning phase, like a dating period," he remarked. "And it's been incredible; our pop-up events have been exceptionally successful."
Following Forever 21's filing for Chapter 11 bankruptcy in 2019 and its announcement to close 200 stores, a significant new development has emerged. The deal, facilitated partly by Forever 21's operator, Sparc Group, has led to a notable change in ownership dynamics.
As part of this arrangement, Sparc Group has agreed to take a minority stake in the fashion giant Shein. In return, Shein will acquire approximately one-third of Sparc, marking a substantial shift in the retail landscape.
In recent news, Shein, a well-known fashion retailer, confidentially filed for an IPO in November but remains privately held. As a private entity, Shein keeps its financial details under wraps.
However, according to Salter, Shein is not just one of the fastest-growing fashion retailers globally, but possibly the largest.
Salter hinted at Shein's massive financial scale, stating, "There are estimates of Shein making over $30 billion. Is it $40 billion, or perhaps $35 billion? I won't disclose their exact figures, but I can assure you it's significantly more than $30 billion."
Shein has not yet responded to requests for comments on these financial speculations.
Authentic's Reebok Acquisition Yields Impressive Growth
Alongside Authentic's recent partnership with Shein, Salter highlighted the success of their acquisition of Reebok. Authentic announced its plan to buy Reebok from Adidas in 2021, and the deal was finalized in 2022.
"Our target was to elevate Reebok to $5 billion in sales within three years. Just one year after acquiring it, we've already hit that mark,"
Salter said. "We aim to double Reebok's retail revenue to $10 billion in the next three years. This demonstrates Reebok's enduring appeal. While Adidas focused on strengthening its brand, perhaps at Reebok's expense, it's now Reebok's time to shine and regain its status as a top athletic brand globally."
Before its sale, Reebok reported $1.6 billion in revenue for fiscal 2020. Since Authentic's acquisition, Reebok's sales have surged by approximately 213%.
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