Shein reveals quarterly loss and FTC investigation as it prepares for Hong Kong stock market debut
Shein has reported a quarterly loss of $99 million, marking a shift from a $395 million profit a year prior. The company disclosed this in its Hong Kong initial public offering prospectus, which also revealed that the fast-fashion giant is currently under investigation by the Federal Trade Commission for potential deceptive business practices. The administration announced the removal of a de minimis exemption, which previously allowed goods valued under $800 to enter the U.S. without tariffs. This policy change, spearheaded by President Trump, has significantly impacted Shein's low-price advantage, forcing the company to consider price increases to offset costs. Additionally, the prospectus highlights a valuation drop from a $100 billion peak to a target of $40-50 billion. The company is actively cooperating with the FTC and preparing for its Hong Kong listing, which was approved by the China Securities Regulatory Commission. Proceeds from the IPO will be used to fund AI-driven logistics and demand forecasting.