Shein is reportedly considering a restructuring of its US operations due to growing tariff pressures that may impact its planned London IPO. According to the Financial Times, the move comes as former US President Donald Trump's tariffs on Chinese imports are set to resume, placing new obstacles in Shein's path.
Shein, which generates around one-third of its $38 billion annual revenue from the US market, currently benefits from the "de minimis" exemption. This provision allows items under $800 shipped to individuals from abroad to bypass tariffs and standard customs procedures. However, this exemption is expected to end within the week, placing increased pressure on the company's cost structure and logistics.
Sources cited by the FT said that one of the options under consideration is shifting production for the US market to countries outside of China. However, no formal decision has yet been made at the board level.
Shein, known for its low-cost fashion offerings, such as $10 dresses and $12 jeans, ships directly from Chinese warehouses to customers in over 150 countries. The company declined to comment to the FT and did not respond to a Reuters request for comment.
Earlier this month, Reuters reported that Shein had received approval from the UK's Financial Conduct Authority (FCA) for its London IPO. The looming end of tariff exemptions in the US could complicate this process by weakening investor confidence and challenging the firm's profitability in its key market.
The developments underscore the mounting trade pressures affecting global retailers reliant on Chinese manufacturing and direct-to-consumer models.
Source: www.reuters.com