Shein Reportedly Weighs US Restructuring Amid Tariff Pressure

Fast fashion retailer Shein is reportedly considering ways to restructure its American business.

This effort is a way to deal with ongoing tariffs on Chinese imports, which have threatened Shein’s plans to go public, the Financial Times (FT) reported Wednesday (April 30).

As the FT noted, Shein’s American business — its largest market and the source of around a third of its $38 billion yearly revenue — will be strained when the U.S. closes the “de minimis” loophole on imports this week. The change will leave the company paying 120% tariffs on items sourced from China.

Two sources with knowledge of Shein’s plans said one solution could be diverting production for U.S. customers to countries outside China. Most of Shein’s supply chain is based in China, but the company does have manufacturing facilities in places like India and Brazil.

The FT noted that if the tariffs caused sustained damage on Shein’s U.S. business, the company would be forced to postpone its highly-anticipated initial public offering (IPO) on the London market, which had originally been slated for the first half of 2025.

“Internally we are all focused on figuring out how to deal with the tariff situation at the moment. Before we have clarity on that, no one can even start to think about the IPO,” said one executive, who declined to be identified because of the sensitivity of the issues.

PYMNTS has contacted Shein for comment but has not gotten a reply.

In the face of the tariffs on Chinese imports, both Shein and rival Temu have reportedly raised prices on some products.

Temu has begun adding “import charges” of about 145%, while Shein hiked prices without tacking on a separate charge.

Other retailers are also dealing with similar pressures. During a panel discussion at the recent Semafor World Economy Summit, Niraj Shah, CEO of eCommerce retailer Wayfair, and Dave Bozeman, president and CEO of transportation and logistics giant C.H. Robinson Worldwide, offered insights on what they’re seeing during this economic disruption.

“The temperature is uncertainty,” said Bozeman, whose company serves 83,000 customers around the world. “Supply chains have been changing since the financial crisis and getting more resilient. … However, when you have the two largest economies [U.S. and China] going head-to-head, no one can really anticipate that.”

Despite these challenges, consumer behavior hasn’t shown major indications of weakness yet, said Shah, whose company works with more than 20,000 suppliers across 100-plus countries.

“Consumer spending has held pretty steady, so that there’s been no real drop-off,” Shah said. “The question really is … what will happen in three- or four-months’ time if prices go up and availability gets more limited?”