Authentic Brands Group (Authentic) and SHEIN announced the signing of a long-term partnership for SHEIN to design, manufacture and distribute a line of Forever 21 apparel and accessories under the brand “Forever 21 x SHEIN” for sale exclusively on SHEIN websites.

In the current retail market space where digital interaction and e-commerce are quickly replacing brick and mortar shops, it is not uncommon to see brands explore strategic partnerships and Authentic will be hoping to leverage SHEIN's digital presence in order to supplement their distribution strategy and target new markets.

While the Authentic and SHEIN partnership will likely be established through a comprehensive suite of legal and commercial documentation and via a legally beneficial vehicle, in the UK a general partnership can be deemed to automatically exist between two or more parties who are trading in common with a view to profit, regardless of the parties' intentions or whether any such documentation exists.  

If a general partnership is deemed to exist, in the absence of any legal paperwork, the law could imply certain terms into the partnership which could have undesirable results.  Further, the partners in a general partnership incur unlimited personal liability whereas a partnership established through a limited partnership, a limited liability partnership or a limited company will have the benefit of limited liability.

To this end you can see the significance of having the correct paperwork in place and taking advice in relation to how best to establish the partnership.  In addition to any main agreement, there would also likely be various other commercial or trading agreements to deal with various aspects of the business side of the partnership e.g. funding, services, supply, distribution, information technology, intellectual property and data protection.  

If you require any advice on general partnerships, joint ventures and/or commercial or trading agreements in general, please feel free to contact Sing Li s.li@teacherstern.com.