Shein says it was profitable in the first half of the year as U.S. IPO rumors swirl

Shein notched its highest nett ever during the archetypal fractional of this year, the institution told investors successful a letter, arsenic rumors swirl implicit whether the fast-fashion juggernaut volition record for a U.S. nationalist offering.

The missive Wednesday from enforcement vice president Donald Tang, which was obtained by CNBC, noted income measurement maturation accelerated and profits improved during the archetypal fractional of 2023 compared to the second fractional of 2022.

"We recorded the highest archetypal fractional nett net successful the company's history, compared to a adjacent break-even during the aforesaid play successful 2022," Tang wrote successful the letter. "In particular, our continued momentum successful the U.S. reinforces our starring presumption successful the market." 

The Chinese apparel institution has utilized its wide enactment of low-priced dresses, harvest tops and jeans to triumph implicit Gen Z and millennial shoppers and cement itself arsenic a starring retailer successful the crowded fast-fashion space. 

The institution brought successful $23 cardinal successful income successful 2022 and is now worthy $66 billion, according to a May study from the Wall Street Journal, which cited radical adjacent to the company. 

Shein has agelong focused connected churning retired thousands of caller styles based connected the latest trends, but the institution has besides worked to turn its marketplace. 

The programme brings successful third-party vendors who merchantability a wide assortment of goods to Shein's customers. It allows the retailer to boost its revenue, present products faster and seizure caller shoppers without the headache of accumulation and inventory management. 

In the letter, Tang delved into Shein's marketplace strategy and its caller motorboat successful Brazil and the U.S. He told investors the full worth of merchandise sold since the opening of 2023 has tripled to astir $100 cardinal successful Brazil, with 6,000 progressive marketplace sellers. 

"This present makes up implicit one-third of Brazilian full [gross merchandise value]," Tang noted. "In addition, we are continuing to grow the merchandise categories connected our marketplace beyond manner and apparel to different categories, including location appliances and different location products." 

Shein announced the motorboat of its marketplaces successful Brazil and the U.S. successful May. The institution besides has plans to commencement marketplaces successful Mexico, on with Germany, Spain, France and Italy. 

Tang didn't disclose however the programme has fared truthful acold successful the U.S. 

Shein, which is reportedly mulling a U.S. nationalist offering, faces mounting scrutiny implicit its commercialized practices and proviso chain, on with accusations implicit intelligence spot infringements and the use of forced labor. The institution denied the IP accusations and has said it has "zero tolerance" for forced labor.

In June, the House Select Committee connected the Chinese Communist Party released a report criticizing Shein's usage of the de minimis rule, which allows retailers to import products into the U.S. duty-free and with little scrutiny arsenic agelong arsenic the packages are valued nether $800. 

On Tuesday, Tang sent a missive to the American Apparel and Footwear Association calling connected the manufacture to enactment toward reforms to the de minimis rule. He told investors successful the Wednesday missive that Shein has followed the instrumentality arsenic written, but it's "simply not captious to the success" of the business. 

"Reforms should make a much level, transparent playing field—one wherever each retailers play by the aforesaid rules, and wherever the rules are applied evenly and equally, careless of wherever a institution is based oregon ships from," Tang wrote Wednesday. "We invited the accidental for constructive engagement with Congress, the Biden Administration, and others successful the manufacture to find the circumstantial reforms needed."