But the opening drew enough criticism that BHV owner Groupe SGM called time on the venture after just seven months, and plans to close the store by the end of the year. This came after local authorities hit Shein with multiple fines, including €150 million for allegedly misusing online cookies (which Shein said was “wholly disproportionate”) and €40 million for “deceptive commercial practices towards consumers” regarding price reductions (which Shein said its subsidiary had rectified a year prior). There was also an attempt to suspend Shein’s online marketplace in France, after French authorities launched an investigation into “childlike” sex dolls being sold by third-party vendors on the site. As of September 1, France’s fast fashion tax has gone into effect, a big step in the country’s attempt to curb fast fashion consumption.
It makes sense, given the brewing anti-China sentiment in US and European policy, that Shein would try to appear more global, says Trexler. “There has been a wave of regulations from California and New York to the EU, which were partly motivated by environmental consciousness, but they also have a strong anti-competitive effect. There is a sense of defending local production against Asian interlopers. We saw this with TikTok first, the concern around a Chinese company having access to massive amounts of US consumer data, and now the national security angle could apply to Shein too.” (Per Bloomberg, Shein is waiting for the Committee on Foreign Investment in the US to conclude a national security review of its Everlane acquisition. Shein initiated the review itself.)
“I think Shein would have had a much higher valuation had it managed to list in New York or London,” says Trexler. “That would have legitimized them as a global economic force.”
Despite this, Tan says Shein seems to be in “a very healthy financial position” right now, and “probably doesn’t need to list at this stage”, but may be seeking an exit to cash out former private equity investors. Indeed, the company has said it plans to pay out $3.5 billion to previous investors after the IPO, almost double the amount it raised. It also said in its IPO prospectus that it planned to use 40% of funds raised on technology, and another 40% on growing awareness.
In its prospectus, the company noted that its total orders skyrocketed from 715 million in 2023 to 1.09 billion for the 12 months ended March 31, 2026, but further growth is far from guaranteed. “There is no assurance that we will continue to grow at the same rate or at all,” Shein wrote. “For example, our growth will suffer if we fail to continue to expand into new markets and product categories or grow our marketplace business. A number of other factors may also cause our growth rate to decline, some of which are beyond our control, including increasing competition, emergence of alternative business models, declining growth of our overall market or industry, changes in general economic conditions, decreasing consumer spending, and changes in rules, regulations and government policies or the implementation and interpretation thereof.”
“I do think Shein has got a lot of near-term challenges,” says Tan, “but I wouldn’t count this company down and out.”