Shein to Invest $271M in UK and Europe

Fast fashion retailer Shein said it would invest USD 271 million over five years in the UK and Europe as the company battles criticism of its model based around flying cheap clothes and accessories from factories in China direct to shoppers worldwide.

Shein, which is preparing for a possible London listing, already sources some clothes from factories in Turkey, although the vast majority of its products are made by around 5,400 suppliers mainly in Guangzhou, China.

Textile associations and politicians in Europe have accused Shein of eroding local industries by flooding the market with garments at prices domestic factories and retailers cannot compete with, partly thanks to its use of a tax break for parcels worth less than 150 euros entering the European Union. A similar tax break in the UK is for parcels worth less than USD 173.

The EU is discussing abolishing the limit as part of a customs reform project proposed by the Commission in May 2023.

Shein said it has earmarked 50 million euros for "potential investments in R&D or pilot Shein production facilities in Europe or the UK," as well as initiatives to help brands and designers from the region reach a bigger market through Shein's marketplace.

Shein, known for its five dollar tops and ten dollar dresses, reportedly recorded sales of about USD 45 billion in 2023 and was valued at USD 66 billion in a fundraising round last year.

Shein executive chairman Donald Tang declined to give further details about where the company was looking to start sourcing from.

The company was "keeping options open" he said, but he noted the facilities would most likely be suppliers, as opposed to being owned and operated by Shein.

Shein also said it would bring more UK and European artists and designers into its incubator programme.

The announcement comes as the company is having to adapt to new European Union rules partly intended to ensure online platforms do not breach intellectual property law.