Fast-fashion retailer Shein has swung to a quarterly net loss of $99 million, marking a significant deterioration in profitability just months before its anticipated public debut.
The result, disclosed in recent filings, signals that the company’s rapid growth model is facing headwinds from shifting trade policies rather than slowing consumer demand alone.
The loss coincides with the removal of an import duty exemption on small packages by US President Donald Trump.
This policy change directly impacts Shein’s core business model, which relies heavily on shipping low-cost garments directly from Chinese manufacturers to US consumers.
The elimination of the de minimis exemption increases the cost base for these shipments, squeezing margins that were already thin in the ultra-fast-fashion segment.
This financial stumble adds complexity to Shein’s upcoming initial public offering on the Hong Kong Stock Exchange.