Shein’s operating profit fell by more than 50%, its first results showed, as geopolitical and economic headwinds dented the Chinese fast-fashion giant’s already-battered business model.
Elevated freight and fuel costs added to the woes facing Shein, which entered public markets last month at a quarter of its peak 2022 valuation: The US and Europe have increased scrutiny of the firm’s mainland supply chains and closed shipping loopholes, as Brussels — targeting Chinese overcapacity — pushes Beijing to accept import quotas.
The retailer’s rejuvenation plans involve targeting higher-value clientele, partly through acquisitions. Shein’s stock has fallen more than 28% after its IPO, suggesting investors had “already priced in bad news,” The Economist wrote.
