Sunday Times - Shein24 Sep 2023 05:30
China-founded fast-fashion giant Shein has seen its UK sales race through the £1 billion mark just two years after setting up in Britain.
In the first set of accounts to show the impact the company has had on British retail, Shein said it made £1.1 million of turnover and £12.2 million profit in the 16 months to December 2022. Its tax bill was just £2.3 million.
The online retailer’s prices — Shein sells T-shirts and dresses for less than £2 — have won over a large customer base, mainly of young women. The sales figure is equivalent to £80 million for each of its 14 UK employees.
Founded by the reclusive entrepreneur Chris Xu, Shein has kept costs down by using a close-knit group of suppliers clustered around its base in Guangzhou. Until recently, it has also saved money by shipping all its goods directly to UK customers’ homes from China, rather than using expensive UK distribution centres.
The business model is changing, however. It has recently taken some warehouse space in the UK and established a corporate office in a Westminster building once home to MI6. It expects to employ 50 people directly in the UK by the end of the year.
The company has changed its domicile from China to Singapore as it gears up for a stock market float in the US. It is aiming to raise global sales of $22.7 billion (£18.5 billion) to $58.5 billion by 2025. Total profits were $700 million last year.
Last month, Shein struck a deal with the owners of youth fashion brand Forever 21 to sell clothes on its site and app, which boast more than 150 million users. Shein is also in talks to buy Missguided from Mike Ashley’s Frasers Group.
Shein’s rapid rise, and prodigious use of air freight, is reigniting concerns about fast-fashion’s environmental impact. About 350,000 tonnes of clothing goes to landfill every year in the UK.
An investigation by Dispatches last year found workers supplying Shein were paid as little as 3p per garment while on 18-hour shifts.
Shein said it was committed to respecting human rights, had zero tolerance for forced labour and robust compliance for Shein-branded products.
https://www.thetimes.co.uk/article/sheins-uk-sales-hit-1bn-but-chinese-retailer-pays-just-2m-tax-npxcfbpd5
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