Shein swings to Q1 loss as tariffs cloud Hong Kong IPO plans - Indian Television

Follow us on Google News Follow us on WhatsApp Share Tweet MUMBAI: For Shein, the latest fashion trend isn’t flying off the shelves, it’s running into headwinds at customs. The fast-fashion retailer posted a $99 million net loss in the first quarter of 2026, reversing a $395 million profit a year earlier, as higher import costs, slowing sales and a one-off accounting charge dented its performance ahead of its planned Hong Kong initial public offering (IPO). According to a Reuters report citing the company’s pre-IPO financial filings, Shein blamed much of the downturn on the removal of the US “de minimis” duty exemption for low-value imports, a policy change that has increased costs and weighed on demand in its largest market. Until the rule changed in May 2025, packages valued below $800 could enter the US duty-free. Products of Chinese origin sold by Shein or through its marketplace and shipped to the United States are now subject to tariffs ranging from 10 per cent to 87.5 per cent, significantly increasing the cost of cross-border shipments. The policy shift has taken a visible toll on the company’s US business. First-quarter revenue from the United States fell 14.3 per cent year-on-year to $2.04 billion, down from $2.38 billion a year earlier. The market accounted for 22.5 per cent of Shein’s quarterly revenue, compared with 29.4 per cent of its annual revenue in 2023. Pressure is also mounting in Europe, the company’s second-largest market. Earlier this month, the European Union introduced a €3 handling fee on low-value e-commerce imports, targeting what it describes as unfair competition from Chinese online retailers. Europe generated around one-third of Shein’s revenue in 2025, making the new levy another potential challenge to future growth. Founded in China and now selling fashion products in around 160 countries, Shein is preparing to list in Hong Kong after earlier attempts to float in New York and London failed to materialise. China’s Securities Regulatory Commission (CSRC) approved the company’s Hong Kong listing on 10 July. While the draft prospectus does not specify the IPO size, pricing or fundraising target, Reuters previously reported that Shein is seeking a valuation of $40 billion to $50 billion. The company said the IPO proceeds will be used to strengthen its technology capabilities, expand brand awareness, grow its international business, support corporate responsibility initiatives and meet general corporate requirements. The filing also revealed a roster of prominent pre-IPO investors, including IDG Capital, Sequoia Capital, HongShan, Tiger Global, Boyu Capital, Brookfield and General Atlantic. For the full year 2025, Shein’s net income declined 38.7 per cent to $2.06 billion, while revenue rose 8 per cent to $41.85 billion. The growth rate marked a sharp slowdown from the 20.7 per cent revenue increase recorded in 2024, reflecting softer post-pandemic e-commerce demand and growing regulatory scrutiny across key international markets. As Shein prepares for its Hong Kong debut, investors will be watching whether the retailer can stitch together growth in an environment where trade barriers and regulatory pressures are proving harder to outpace than fashion trends. Related Topics: de minimis fast fashion Hong Kong IPO Reuters Shein tariffs You may like Advertisement Advertisement Advertisement Advertisement Indian Television Dot Com Pvt Ltd Signup for news and special offers! Please correct the marked field(s) below. 1,true,6,Contact Email,2 Thank you for Signing Up TVLinx ADLinx