SHEIN Loses 67% of Its Profits and Stock Plunges 10% Near IPO

Reports revealed a sharp decline in profits for Chinese fast-fashion giant SHEIN, as its quarterly profits dropped by 67% compared to the same period last year, driven by multiple pressures led by rising shipping costs, changes in US import duties, and falling sales in European markets, according to reports.

This announcement coincided with the company's stock price dropping by more than 10% around the time of its public listing, raising widespread questions about its ability to maintain its ultra-low pricing model amid rapid shifts in the global customs tariff environment. Analysts explained that SHEIN's model relied heavily on customs exemptions for small shipments—exemptions that are now under threat in the United States and the European Union.

In the same context, retail experts noted that SHEIN's weak performance in Europe reflects a shift in European consumer attitudes, becoming more sensitive to sustainability issues and working conditions, alongside growing interest from European lawmakers in regulating fast fashion and Chinese e-commerce companies.

As a result, analysts believe that the upcoming period will bring increased pressure on the low-cost fast-fashion model as customs and environmental regulations escalate in the company's key markets, potentially forcing SHEIN to review its pricing and supply strategy in the next stage.

What do these terms mean?

**Fast Fashion:** A production model based on designing and producing cheap clothing at a very fast pace to keep up with the latest fashion trends, focusing on low pricing and rapid delivery.

**Import Duties:** Taxes imposed by governments on goods entering from abroad. Changing these rules raises costs for companies that rely on imports from China.

**Initial Public Offering (IPO):** The first offering of a company's shares to the public on the stock exchange, serving as a test of market confidence in the company's value and future.