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Shein acquired a stake in rival fast-fashion retailer Forever 21 to expand its online offerings and establish a brick-and-mortar presence in the US.

The Singapore-based retailer, which already generates a large portion of its sales in the US, is trying to shift to an Amazon-style marketplace where sellers can list their own products alongside those manufactured by Shein. Forever 21 products will be available to Shein's 150 million online customers, according to a statement.

Closely held Shein, which has been considering going public according to reports, will also have the option to test in-person shopping experiences at Forever 21 locations in the US. The Asian retailer has built a business worth $66 billion almost entirely online.

In the deal, Shein acquired about one-third of Sparc Group, which owns Forever 21 through a joint venture that includes Authentic Brands Group Inc. and Simon Property Group Inc. In return, Sparc Group became a minority shareholder in Shein. Specific financial figures weren't disclosed.

"The powerful combination of Simon's leadership in physical retail, Authentic's brand development expertise, and Shein's on-demand model will help us drive scalable growth and together make fashion more accessible to all," Shein's executive chairman Donald Tang said in a statement.

Shein, which sells some of its fashion products for less than $5, has quickly risen to prominence in the ultra-low-priced apparel market, unseating brands like Forever 21 and Charlotte Russe that were popular in the early 2000s.

Forever 21, which had 800 stores at its peak and relied on a mall-based strategy, struggled as more shopping moved online. It was acquired out of bankruptcy in 2020 by a consortium of brands including Simon Property and Authentic. The partnership with Shein could be a way for it to expand its online reach and get its name in front of Gen Z shoppers, who are Shein's most loyal customers.