Shoppers walk past advertisements on the opening day of fast fashion e-commerce giant Shein, which will host a pop-up inside Forever 21 at the Ontario Mills Mall in Ontario on Thursday, October 19, 2023.
Allen J. Schaben | Los Angeles Times | fake images
ORLANDO, Fla. – Little is known about how much revenue Shein generates or how profitable it is.
But the fast-fashion company’s sales are “much more” than the $30 billion it supposedly generates annually, one of the retailer’s key partners said Monday.
“Shein is the fastest-growing fashion retailer in the world, if not the largest fashion retailer in the world,” said Jamie Salter, founder and CEO of private brand management firm Authentic Brands Group, during a fireside chat. at the ICR Conference. in Orlando.
“There is talk that they make 30 billion, do they make 40 billion? Do they make 35 billion? I’m not going to tell you exactly what they do, but I can tell you that they make much more than 30 billion dollars.” Salter continued in an apparent reference to Shein’s annual sales.
As a private company, Shein does not disclose its finances. It may soon have to do so after the retailer confidentially filed to go public in the U.S., following breakneck growth and months of efforts to resolve a host of concerns lawmakers had about its business practices. .
However, Salter is familiar with Shein’s finances due to a partnership he signed with the company last summer. As part of the deal, Shein acquired approximately one-third of Sparc Group, a joint venture that includes Authentic and Simón Real Estate Group. Sparc acquired a minority stake in Shein.
Sparc is the operator of Forever 21, owned by Authentic. As part of the partnership, Shein began selling a co-branded clothing line with Forever 21 and hosted pop-up events at the retailer’s numerous stores.
Very little is known about Shein’s finances, but snippets have been leaked to the press in recent years as the retailer prepares for an initial public offering. Shein’s best available revenue figure appeared in a May Wall Street Journal article, which said the company made $23 billion in sales in 2022, citing people close to the company.
The outlet reported that Shein had set a goal of increasing sales by 40% in 2023, which would have raised its revenue to more than $30 billion. It’s unclear whether the company met that goal.
Shein did not immediately respond to a request for comment.
If Shein’s sales are “much more” than $30 billion annually, its revenue would still be far less than retail giants like Walmart and Amazon, which generate hundreds of billions in sales annually. However, the figure would put it at least in line with Inditex, owner of Zara, which recorded €32 billion in sales in 2022, and H&M, which recorded around $22 billion in sales that year.
Total sales of more than $30 billion would mean Shein eclipses U.S. retailers like Abercrombie & Fitch and American Eaglewhich recently reported annual sales of $3.7 billion and $5 billion, respectively.
During the conversation, Salter talked about Authentic’s history, its growth plans, and how it decided to partner with Shein. When asked what some of his biggest mistakes were, he said one of them was not recognizing the competitive threat previously posed by Shein and China-based online marketplace Temu.
“My partner, [Simon Property Group CEO David Simon] He said: ‘Why are you partnering with Shein? Do you think that is the right decision? and I said, ‘David, it’s the right decision, we can’t beat them.’ His supply chain is too good. They know what’s going on. They have realized this. We need to partner with them,'” Salter recalled. “So I was the brave one who said, ‘Let’s partner with these guys.'”
Salter said the partnership is still in its early stages — “We’re dating right now,” he said — and the two companies are still learning to trust each other.
“The pop-ups have been big home runs and, you know, Shein’s Forever 21 has been good, it hasn’t been great, but it’s still early. So the jury is still out,” Salter said. “You’re dealing with some people who don’t speak the language the same way we do, they have a different set of rules than us and a trust factor, it takes time, you know? You don’t learn to trust someone in 15 minutes. You have that earning that trust… is a work in progress.”
