Customers hold shopping bags outside the Shein Tokyo showroom in Tokyo, Nov. 13, 2022.
Noriko Hayashi | Bloomberg | Getty Images
Shein notched its highest profit ever through the first half of this yr, the corporate told investors in a letter, as rumors swirl over whether the fast-fashion juggernaut will file for a U.S. initial public offering.
The missive Wednesday from Executive Vice Chairman Donald Tang, which was obtained by CNBC, noted sales volume growth accelerated and profits improved through the first half of 2023 compared with the latter half of 2022.
related investing news
“We recorded the very best first half net profit in the corporate’s history, in comparison with a near break-even through the same period in 2022,” Tang wrote within the letter. “Specifically, our continued momentum within the U.S. reinforces our leading position out there.”Â
The corporate, which was founded in China and is now based in Singapore, has used its big choice of low-priced dresses, crop tops and jeans to win over Gen Z and millennial shoppers and cement itself as a number one retailer within the crowded fast-fashion space.Â
The corporate brought in $23 billion in sales in 2022 and is now value $66 billion, in keeping with a May report from The Wall Street Journal, which cited people near the corporate.Â
Shein has long focused on churning out hundreds of recent styles based on the newest trends, but the corporate has also worked to grow its marketplace.Â
This system brings in third-party vendors who sell a wide range of products to Shein’s customers. It allows the retailer to spice up its revenue, deliver products faster and capture latest shoppers without the headache of production and inventory management.Â
Within the letter, Tang delved into Shein’s marketplace strategy and its recent launch in Brazil and the U.S. He told investors the monthly total value of merchandise sold for the reason that starting of 2023 has tripled to just about $100 million in Brazil, with 6,000 energetic marketplace sellers.Â
“This now makes up over one-third of Brazilian total [gross merchandise value],” Tang noted. “As well as, we’re continuing to expand the product categories on our marketplace beyond fashion and apparel to other categories, including home appliances and other home products.”Â
Shein announced the launch of its marketplaces in Brazil and the U.S. in May. The corporate also has plans to start out marketplaces in Mexico, together with Germany, Spain, France and Italy.Â
Tang didn’t disclose how this system has fared to date within the U.S.Â
IPO rumors swirl as congressional scrutiny intensifiesÂ
In June, the U.S. House Select Committee on the Chinese Communist Party released a report criticizing Shein’s use of the de minimis rule, which allows retailers to import products into the U.S. duty-free and with less scrutiny so long as the packages are valued under $800.Â
On Tuesday, Tang sent a letter to the American Apparel and Footwear Association calling on the industry to work toward reforms to the de minimis rule. He told investors within the Wednesday letter that Shein has followed the law as written, but it surely’s “simply not critical to the success” of the business.Â
“Reforms should create a more level, transparent playing field — one where all retailers play by the identical rules, and where the principles are applied evenly and equally, no matter where an organization is predicated or ships from,” Tang wrote Wednesday. “We welcome the chance for constructive engagement with Congress, the Biden Administration, and others within the industry to find out the precise reforms needed.”
