5 ms·

Shein Files for U.S. IPO

42 points by mfiguiere 3y ago

ggm 3y ago
Their entire model is based on disposable fashion. Every step of the supply chain behind "wear it once" is risky, in terms of labour relations, inputs, waste, and final disposition of the product. I think the IPO will do fine, because the stream of consumers worldwide is massive and so there's a sustaining business model here, at a significant externality/cost to everything else.
- KennyBlanken 3y ago
  [flagged]
  - triceratops 3y ago
    > As many have noted: the truly wealthy don't really engage in gaudy displays I don't know about that... > one person take[s] a jet from NYC to Switzerland for a ski weekend There it is.
    - ggm 3y ago
      It's only gaudy if the jet is bright non-standard colours and you have a pink limo meet you. If the jet is anonymous, and you have a quiet take off and welcome experience its not gaudy, its just luxe. My experience of HNW individuals is they are rarely gaudy if its old money, and are sometimes gaudy if its very new money, but that gaudy and discrete lies across the spectrum.
      - triceratops 3y ago
        From my perspective, both of those people are absolute clowns. "Gaudy" is subjective and seems to roughly translate to "something that old money, for any arbitrary reason, thinks is beneath them".
        sgift 3y ago
        Yeah, it's just a term rich people use to be able to look down on other rich people. "Oh, his family hasn't even had money for 100 years ... so gaudy. No wonder he sometimes eats up his whole plate, probably didn't always have food"
        ggm 3y ago
        It has existed as a word for a very long time. I don't disagree to your meaning but don't think this is a new trend, the word has roots back in time. Vulgar displays of wealth have been a problem, which is why successive governments passed Sumptuary laws. At times, specific colours were forbidden to the hoi polloi which is of course also a derogatory term. From memory you'll find complaints about the gaudy new money in Edith Wharton's "the Buccaneers" amongst other novels.
- llsf 3y ago
  It might hit a wall, but it is supercharged right now. It does not look like a sustainable model for the planet for sure. Feels like they build items that are used few days, and then end up in landfill.
  - skyyler 3y ago
    It's the same thing H&M does, just accelerated.
    - aplummer 3y ago
      Everyone says this about H&M (and Uniqlo), am I the only one with H&M basics that have lasted 5+ years? I don't necessarily see how their fashion is "fast"
      - mvdtnz 3y ago
        You're certainly not the only one. I have plenty of H&M basics that I've had for years. They're not the most robust clothing, so I tend not to wear them when I'm working in the garage or clearing brush. But they're perfectly fine clothes for everyday wear.
      - sgift 3y ago
        No, you aren't. As usual, things are relative. H&Ms business model has always been "fast fashion", but mostly in the original sense, which is taking a catwalk trend, replicate it and bring it to market while everyone still wants it. Their clothing never lasted as long as clothing from "older" companies, but that's because most of them - especially in the early years of H&M - still were in the business of making things last a lifetime or at least 20+ years. H&M recognized that even if our cloth can be used longer, most of us switch our wardrobe every 5-10 years and made their clothing accordingly. It's in no way comparable to Shein or kik (don't know if they exist outside of Germany), which make fast fashion in both senses: They quickly replicate the trends, but also make their clothing so cheap that you are lucky if you can wear them a year. And it seems even half a year is impossible with some of their newest things, from that I've read. These companies are in the business of producing garbage, which can be worn on the way between factory and landfill, nothing more.
mattboardman 3y ago
>people familiar with the matter said Why is this line used everywhere in the news? What is the consequence of getting someone on the record for speculating the value of an IPO? It's the most frustrating and lazy part of journalism.
- Civitello 3y ago
  It is used because the alternative is to not provide the information.
- null0pointer 3y ago
  They use it because it provides an air of authority when the "person familiar with the matter" could be literally anyone.
- solardev 3y ago
  Sometimes people don't want to go on the record talking about their employer, for fear of repercussions. Employees have minimal protections in the US, and if you get fired, there goes your health insurance, all your prescription medications, dental and vision coverage, your ability to pay rent, pay for auto insurance, etc. We have very poor social safety nets and if you lose your job you mostly lose your life. If you're lucky you might have a couple months of savings, but even that is uncommon outside tech circles. Not worth it just to appease some journalist.
  - mattboardman 3y ago
    Why not interview someone willing to go on the record that will speculate the IPO value? There are plenty of articles where they interview professional investors with knowledge about such matters who go on the record.
    - solardev 3y ago
      I think journalists typically prefer nameable sources whenever they can find one. They can't always, or those sources have had bad experiences with other journalists and don't want to bother, etc. Keep in mind that journalism in the US is itself a very underpaid profession that mostly fails to pay a living wage. Journalists work on tight deadlines with minimal support and don't always have the luxury of doing deep investigative reporting. They might only have a few hours to get a story ready, and if no nameable sources are willing to come forward, well, maybe that anonymous one is better than nothing. Source: anecdotal only, former journalism major, knew writers in the industry. --- Edit: not defending the practice, just saying it happens. Sometimes there are just lazy or plain bad journalists too. I don't know this writer and won't speculate, but in general it's not unusual to cite anonymous sources. If we want to discourage that practice, it's not something an individual journalist can fix (short of cultivating long term sources). Most sources have no protection, and even real whistleblowers (like Snowden or Reality Winner) who are supposed to have protections are just left hung out to dry. For a source, talking to the media has a lot of risks and almost no upsides.
orangechairs 3y ago
I only ever hear about Shein in a negative light. It's never been entirely clear to me why Forever21's and H&M's disposable clothing is somehow morally superior to Shein's.
- llsf 3y ago
  Not 100% sure, but it look like with "Shein drops up to 10,000 new items on its website daily" (source: https://www.npr.org/2023/10/13/1204983212/shein-america-fast-fashion-legal-issues https://www.npr.org/2023/10/13/1204983212/shein-america-fast...), it is H&M and Zara on steroids. The expiration date on clothes is so short that now transporting it by boat is not too slow, and they have to take plane. (writing this post, while wearing 4yo jeans, and 5yo t-shirt)
  - tcdent 3y ago
    I think people just look at the price and assume it must be terrible, somehow. Fast fashion gets a bad rap because of the assumptions about consumer behavior and labor. Almost all clothing is terrible for the environment and for the people manufacturing it, anyway. I have many H&M items that are nearly a decade old and are still wearable.
    - llsf 3y ago
      As long as the piece is durable, it should be fine. I might be extreme, as I prefer fewer stuff of better quality, that last years. Like a pair of jeans that I can wear every day for years.
- flappyeagle 3y ago
  They are remarkably less disposable. That's how bad Shein is. I worked in the industry in a past life and I've seen how the sausage is made. Shein has got the nastiest sausage.
- StopHammoTime 3y ago
  It has been alleged that Shein uses forced labor to make its products (https://www.cnbc.com/2023/05/01/shein-china-congress-forced-labor-inquiry.html https://www.cnbc.com/2023/05/01/shein-china-congress-forced-...). Anecdotally, I have heard that there is three towns where a predominant amount of Shein clothes are made and while people are free to leave, they’re paid in “company bucks” akin to company towns in the late 1800s/early 1900s US.
harryVic 3y ago
We need a recycling tax on fast fashion like we do for other electronic goods.
underlines 3y ago
EU and the country I live in try to battle super fast fashion: https://www-srf-ch.translate.goog/sendungen/kassensturz-espresso/kassensturz/textilrecycling-loesung-fuer-das-fast-fashion-problem?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en-US&_x_tr_pto=wapp https://www-srf-ch.translate.goog/sendungen/kassensturz-espr...
- thiago_fm 3y ago
  Just because Switzerland is rich. Then it's easy to "battle" a battle you've already won
thiago_fm 3y ago
The HN crowd will just rebel against it, but they are such a Big success story. Another thing most people can't see is how Shein is good at logistics. Just wait a few years and you'll see in how many other verticals they will operate. Big business. They will completely disrupt fast fashion. I bet most people here buy fast fashion or even worst clothes for the environment, but as they are buying it in Zara or H&M, they feel they are less worst than Shein, but it's all the same... Despite that you pay more.
- bilekas 3y ago
  Well it's a bit disingenuous to say it's all the same. I think the issue for people I've spoken to at least seems to push more on the forced and or child labour. You're right they are a financial success story. 66 Billion evaluation is extraordinary to me and just highlights how much demand there is.
  - thiago_fm 3y ago
    Give me a fast fashion brand and I'll show you how they do forced labour and trick you into thinking they are better off.
- Racing0461 3y ago
  [flagged]
- fnordpiglet 3y ago
  You’re absolutely right that Zara, et al, are not acceptably sourcing their goods. That doesn’t absolve Shein, and if your business model is based on tiny margins you can’t survive without exploitation. At least higher margin brands have room to compress margins and improve their business model without killing their brand. But it’s all moot - people are obsessed with the dopamine from buying things whether it’s necessary or quality or not. Sigh.
- khuey 3y ago
  Eh Shein in particular is exploiting a loophole in US law related to shipping small value items direct to consumers from abroad that Congress could and should close.
relyks 3y ago
Shein is a plague and Congress is complicit in allowing them to succeed. What happened to being hard on China? Why is it that the U.S. allows Chinese companies to succeed here, but China doesn't allow companies from here to succeed there? They skirt around paying import duties and tariffs that equal to around 34% of the value of the goods. The U.S. should be getting more money from them. "Ecommerce companies are exempt from paying tariffs on products with a retail value less than $800, if they are shipped directly to individual customers" (https://www.businessoffashion.com/news/sustainability/shein-and-temu-are-skirting-tariff-costs-us-lawmakers-say/ https://www.businessoffashion.com/news/sustainability/shein-...) Also, if their IPO prospectus does not include that a change in trade law can affect their business model as a risk, Shein is a fraud.
- ecshafer 3y ago
  Clothing companies are allowed to succeed in China. Brands like Nike sell t-shirts for 10x what they are sold at here in the US. While China doesn't let US firms compete on the internet, they do compete in clothing just fine.
- jgalt212 3y ago
  What the money men want, the money men get.
- jfim 3y ago
  From TFA: > Numerous lawmakers, including 16 Republican attorneys general, have called on the SEC to ensure Shein isn’t using forced labor in its supply chain before it’s allowed to start trading in the U.S.
- m3kw9 3y ago
  This stock will have a perpetual big short float just based on them losing that advantage
- adrr 3y ago
  How are they shipping to the US so cheaply? I can buy a product for $2 and its ships for free. They must be paying next to nothing for shipping. When i worked for an e-commerce company it was $8 to $10 per order incurred in shipping costs when our volume was millions of orders per month.
m3kw9 3y ago
So was the price advantage loop hole they exploited closed?
- deleted 3y ago
  [deleted]
lgkk 3y ago
Anyone interested in building a renewable clothing company together?
- ChatGTP 3y ago
  Checkout Patagonia, IMO they're already done it. I cherish pretty much every single item I own of theirs. I used to wear "skater hoodies", those brand name things, once I went into a Patagonia store and bought a hoody (once I had some money, had a job). For the first winter in my life I actually felt warm. I never looked back since. I still have that hoodie, it's probably ten years old now. Still looks great.
  - lgkk 3y ago
    Nice that’s great. Yeah exactly, I think there’s some interesting things to try out in different price segments. I’d love a “recurring” subscription type thing for personal garments especially as seasons change.
    - ChatGTP 3y ago
      Funny side effect of Patagonia clothes is that sometimes I do get "bored" and want another jacket which kind of goes against the company ethos ha. Over the years however, I have accumulated a few different jackets and sweaters from them so I can mix it up a bit. I figured if I was being cheaper quality, less fashionable clothing I'd probably have purchased 5-10x the amount of actual material by now. Some of the items I own have gone and come back into fashion too. On the flip side, some of my jackets have a nice worn in look to them :)

42 points by mfiguiere 3y ago

ggm 3y ago

Their entire model is based on disposable fashion. Every step of the supply chain behind "wear it once" is risky, in terms of labour relations, inputs, waste, and final disposition of the product. I think the IPO will do fine, because the stream of consumers worldwide is massive and so there's a sustaining business model here, at a significant externality/cost to everything else.

KennyBlanken 3y ago
[flagged]
- triceratops 3y ago
  > As many have noted: the truly wealthy don't really engage in gaudy displays I don't know about that... > one person take[s] a jet from NYC to Switzerland for a ski weekend There it is.
  - ggm 3y ago
    It's only gaudy if the jet is bright non-standard colours and you have a pink limo meet you. If the jet is anonymous, and you have a quiet take off and welcome experience its not gaudy, its just luxe. My experience of HNW individuals is they are rarely gaudy if its old money, and are sometimes gaudy if its very new money, but that gaudy and discrete lies across the spectrum.
    - triceratops 3y ago
      From my perspective, both of those people are absolute clowns. "Gaudy" is subjective and seems to roughly translate to "something that old money, for any arbitrary reason, thinks is beneath them".
      - sgift 3y ago
        Yeah, it's just a term rich people use to be able to look down on other rich people. "Oh, his family hasn't even had money for 100 years ... so gaudy. No wonder he sometimes eats up his whole plate, probably didn't always have food"
      - ggm 3y ago
        It has existed as a word for a very long time. I don't disagree to your meaning but don't think this is a new trend, the word has roots back in time. Vulgar displays of wealth have been a problem, which is why successive governments passed Sumptuary laws. At times, specific colours were forbidden to the hoi polloi which is of course also a derogatory term. From memory you'll find complaints about the gaudy new money in Edith Wharton's "the Buccaneers" amongst other novels.
llsf 3y ago
It might hit a wall, but it is supercharged right now. It does not look like a sustainable model for the planet for sure. Feels like they build items that are used few days, and then end up in landfill.
- skyyler 3y ago
  It's the same thing H&M does, just accelerated.
  - aplummer 3y ago
    Everyone says this about H&M (and Uniqlo), am I the only one with H&M basics that have lasted 5+ years? I don't necessarily see how their fashion is "fast"
    - mvdtnz 3y ago
      You're certainly not the only one. I have plenty of H&M basics that I've had for years. They're not the most robust clothing, so I tend not to wear them when I'm working in the garage or clearing brush. But they're perfectly fine clothes for everyday wear.
    - sgift 3y ago
      No, you aren't. As usual, things are relative. H&Ms business model has always been "fast fashion", but mostly in the original sense, which is taking a catwalk trend, replicate it and bring it to market while everyone still wants it. Their clothing never lasted as long as clothing from "older" companies, but that's because most of them - especially in the early years of H&M - still were in the business of making things last a lifetime or at least 20+ years. H&M recognized that even if our cloth can be used longer, most of us switch our wardrobe every 5-10 years and made their clothing accordingly. It's in no way comparable to Shein or kik (don't know if they exist outside of Germany), which make fast fashion in both senses: They quickly replicate the trends, but also make their clothing so cheap that you are lucky if you can wear them a year. And it seems even half a year is impossible with some of their newest things, from that I've read. These companies are in the business of producing garbage, which can be worn on the way between factory and landfill, nothing more.

mattboardman 3y ago

>people familiar with the matter said Why is this line used everywhere in the news? What is the consequence of getting someone on the record for speculating the value of an IPO? It's the most frustrating and lazy part of journalism.

Civitello 3y ago
It is used because the alternative is to not provide the information.
null0pointer 3y ago
They use it because it provides an air of authority when the "person familiar with the matter" could be literally anyone.
solardev 3y ago
Sometimes people don't want to go on the record talking about their employer, for fear of repercussions. Employees have minimal protections in the US, and if you get fired, there goes your health insurance, all your prescription medications, dental and vision coverage, your ability to pay rent, pay for auto insurance, etc. We have very poor social safety nets and if you lose your job you mostly lose your life. If you're lucky you might have a couple months of savings, but even that is uncommon outside tech circles. Not worth it just to appease some journalist.
- mattboardman 3y ago
  Why not interview someone willing to go on the record that will speculate the IPO value? There are plenty of articles where they interview professional investors with knowledge about such matters who go on the record.
  - solardev 3y ago
    I think journalists typically prefer nameable sources whenever they can find one. They can't always, or those sources have had bad experiences with other journalists and don't want to bother, etc. Keep in mind that journalism in the US is itself a very underpaid profession that mostly fails to pay a living wage. Journalists work on tight deadlines with minimal support and don't always have the luxury of doing deep investigative reporting. They might only have a few hours to get a story ready, and if no nameable sources are willing to come forward, well, maybe that anonymous one is better than nothing. Source: anecdotal only, former journalism major, knew writers in the industry. --- Edit: not defending the practice, just saying it happens. Sometimes there are just lazy or plain bad journalists too. I don't know this writer and won't speculate, but in general it's not unusual to cite anonymous sources. If we want to discourage that practice, it's not something an individual journalist can fix (short of cultivating long term sources). Most sources have no protection, and even real whistleblowers (like Snowden or Reality Winner) who are supposed to have protections are just left hung out to dry. For a source, talking to the media has a lot of risks and almost no upsides.

orangechairs 3y ago

I only ever hear about Shein in a negative light. It's never been entirely clear to me why Forever21's and H&M's disposable clothing is somehow morally superior to Shein's.

llsf 3y ago
Not 100% sure, but it look like with "Shein drops up to 10,000 new items on its website daily" (source: https://www.npr.org/2023/10/13/1204983212/shein-america-fast-fashion-legal-issues https://www.npr.org/2023/10/13/1204983212/shein-america-fast...), it is H&M and Zara on steroids. The expiration date on clothes is so short that now transporting it by boat is not too slow, and they have to take plane. (writing this post, while wearing 4yo jeans, and 5yo t-shirt)
- tcdent 3y ago
  I think people just look at the price and assume it must be terrible, somehow. Fast fashion gets a bad rap because of the assumptions about consumer behavior and labor. Almost all clothing is terrible for the environment and for the people manufacturing it, anyway. I have many H&M items that are nearly a decade old and are still wearable.
  - llsf 3y ago
    As long as the piece is durable, it should be fine. I might be extreme, as I prefer fewer stuff of better quality, that last years. Like a pair of jeans that I can wear every day for years.
flappyeagle 3y ago
They are remarkably less disposable. That's how bad Shein is. I worked in the industry in a past life and I've seen how the sausage is made. Shein has got the nastiest sausage.
StopHammoTime 3y ago
It has been alleged that Shein uses forced labor to make its products (https://www.cnbc.com/2023/05/01/shein-china-congress-forced-labor-inquiry.html https://www.cnbc.com/2023/05/01/shein-china-congress-forced-...). Anecdotally, I have heard that there is three towns where a predominant amount of Shein clothes are made and while people are free to leave, they’re paid in “company bucks” akin to company towns in the late 1800s/early 1900s US.

harryVic 3y ago

We need a recycling tax on fast fashion like we do for other electronic goods.

underlines 3y ago

EU and the country I live in try to battle super fast fashion: https://www-srf-ch.translate.goog/sendungen/kassensturz-espresso/kassensturz/textilrecycling-loesung-fuer-das-fast-fashion-problem?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en-US&_x_tr_pto=wapp https://www-srf-ch.translate.goog/sendungen/kassensturz-espr...

thiago_fm 3y ago
Just because Switzerland is rich. Then it's easy to "battle" a battle you've already won

thiago_fm 3y ago

The HN crowd will just rebel against it, but they are such a Big success story. Another thing most people can't see is how Shein is good at logistics. Just wait a few years and you'll see in how many other verticals they will operate. Big business. They will completely disrupt fast fashion. I bet most people here buy fast fashion or even worst clothes for the environment, but as they are buying it in Zara or H&M, they feel they are less worst than Shein, but it's all the same... Despite that you pay more.

bilekas 3y ago
Well it's a bit disingenuous to say it's all the same. I think the issue for people I've spoken to at least seems to push more on the forced and or child labour. You're right they are a financial success story. 66 Billion evaluation is extraordinary to me and just highlights how much demand there is.
- thiago_fm 3y ago
  Give me a fast fashion brand and I'll show you how they do forced labour and trick you into thinking they are better off.
Racing0461 3y ago
[flagged]
fnordpiglet 3y ago
You’re absolutely right that Zara, et al, are not acceptably sourcing their goods. That doesn’t absolve Shein, and if your business model is based on tiny margins you can’t survive without exploitation. At least higher margin brands have room to compress margins and improve their business model without killing their brand. But it’s all moot - people are obsessed with the dopamine from buying things whether it’s necessary or quality or not. Sigh.
khuey 3y ago
Eh Shein in particular is exploiting a loophole in US law related to shipping small value items direct to consumers from abroad that Congress could and should close.

relyks 3y ago

Shein is a plague and Congress is complicit in allowing them to succeed. What happened to being hard on China? Why is it that the U.S. allows Chinese companies to succeed here, but China doesn't allow companies from here to succeed there? They skirt around paying import duties and tariffs that equal to around 34% of the value of the goods. The U.S. should be getting more money from them. "Ecommerce companies are exempt from paying tariffs on products with a retail value less than $800, if they are shipped directly to individual customers" (https://www.businessoffashion.com/news/sustainability/shein-and-temu-are-skirting-tariff-costs-us-lawmakers-say/ https://www.businessoffashion.com/news/sustainability/shein-...) Also, if their IPO prospectus does not include that a change in trade law can affect their business model as a risk, Shein is a fraud.

ecshafer 3y ago
Clothing companies are allowed to succeed in China. Brands like Nike sell t-shirts for 10x what they are sold at here in the US. While China doesn't let US firms compete on the internet, they do compete in clothing just fine.
jgalt212 3y ago
What the money men want, the money men get.
jfim 3y ago
From TFA: > Numerous lawmakers, including 16 Republican attorneys general, have called on the SEC to ensure Shein isn’t using forced labor in its supply chain before it’s allowed to start trading in the U.S.
m3kw9 3y ago
This stock will have a perpetual big short float just based on them losing that advantage
adrr 3y ago
How are they shipping to the US so cheaply? I can buy a product for $2 and its ships for free. They must be paying next to nothing for shipping. When i worked for an e-commerce company it was $8 to $10 per order incurred in shipping costs when our volume was millions of orders per month.

m3kw9 3y ago

So was the price advantage loop hole they exploited closed?

deleted 3y ago
[deleted]

lgkk 3y ago

Anyone interested in building a renewable clothing company together?

ChatGTP 3y ago
Checkout Patagonia, IMO they're already done it. I cherish pretty much every single item I own of theirs. I used to wear "skater hoodies", those brand name things, once I went into a Patagonia store and bought a hoody (once I had some money, had a job). For the first winter in my life I actually felt warm. I never looked back since. I still have that hoodie, it's probably ten years old now. Still looks great.
- lgkk 3y ago
  Nice that’s great. Yeah exactly, I think there’s some interesting things to try out in different price segments. I’d love a “recurring” subscription type thing for personal garments especially as seasons change.
  - ChatGTP 3y ago
    Funny side effect of Patagonia clothes is that sometimes I do get "bored" and want another jacket which kind of goes against the company ethos ha. Over the years however, I have accumulated a few different jackets and sweaters from them so I can mix it up a bit. I figured if I was being cheaper quality, less fashionable clothing I'd probably have purchased 5-10x the amount of actual material by now. Some of the items I own have gone and come back into fashion too. On the flip side, some of my jackets have a nice worn in look to them :)