Shein in Trouble in the US: Fashion Giant Fears Huge Fines

Online fashion giant Shein reveals an investigation by the US Federal Trade Commission that could lead to heavy fines. The company reports a quarterly loss and difficulties with its planned IPO in Hong Kong.

Online fashion giant Shein has revealed that it is under investigation by the US Federal Trade Commission (FTC), which could impose heavy financial penalties. The company disclosed the investigation in official documents submitted to the Hong Kong Stock Exchange ahead of its planned IPO. An FTC spokesperson confirmed the existence of a consumer protection investigation, but the exact reasons were not detailed. The investigation comes at a sensitive time, after Shein was forced to move its IPO efforts to Hong Kong due to regulatory difficulties in New York and London, including the Chinese regulator's refusal to approve a prospectus that mentioned the use of forced labor of the Uyghur minority. Meanwhile, the company posted a quarterly loss, partly due to a slowdown in US sales after the elimination of the duty-free exemption for small packages from abroad. Shein, valued at $100 billion in 2022, now faces the challenge of navigating the investigation, slowing sales, and losses to complete the IPO.