Shein Plans to Bolster Compliance and Logistics Execs Ahead of US Marketplace

FILE PHOTO: A Shein logo is pictured at the company's office in the central business district of Singapore, October 18, 2022. REUTERS/Chen LinREUTERS
FILE PHOTO: A Shein logo is pictured at the company's office in the central business district of Singapore, October 18, 2022. REUTERS/Chen LinREUTERS
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Shein Plans to Bolster Compliance and Logistics Execs Ahead of US Marketplace

FILE PHOTO: A Shein logo is pictured at the company's office in the central business district of Singapore, October 18, 2022. REUTERS/Chen LinREUTERS
FILE PHOTO: A Shein logo is pictured at the company's office in the central business district of Singapore, October 18, 2022. REUTERS/Chen LinREUTERS

Fast-fashion retailer Shein is boosting senior leaders and executives to roll out its US marketplace and to meet regulatory compliance as it deepens its footprint in North America and looks to diversify away from China.

The company is hiring a US head of logistics, who will be a liaison between Shein’s US and Singapore headquarters, according to a LinkedIn job posting. The company is also hiring an anti-money laundering and compliance executive and a number of US marketplace personnel, as reported by Modern Retail, Reuters reported.

The hiring comes as Shein, a Singapore-based, China-founded e-retailer, faces more scrutiny from US lawmakers who have worries about the company’s connections to China. It is not clear when the company wants to fill the role.

The head of logistics will manage Shein’s relationships with its third-party logistics companies, warehouses and trucking companies. The person will also help the retailer’s overseas logistics team “optimize the import process and handle some daily customs clearance exceptions (cross-border sellers’ orders),” according to the job posting.

Shein, which gained popularity in the US for its $10 dresses and $5 accessories, has come under scrutiny by multiple governments for its relationship with China. US and Brazil lawmakers have particularly criticized its use of customs exemptions that allows low-cost packages shipped directly to consumers to enter the countries duty-free. Brazil is still deciding on a tax rate for shipments from international e-commerce companies.

The US exemption, which was raised from $200 to $800 in 2016, was originally created to offset the costs of checking low-priced shipments, but critics say that e-commerce companies, especially those from China, have disproportionately benefited from it. Critics of the exemption also worry that de minimis shipments from China evade regulations banning forced labor in the consumer product supply chain.

A bipartisan group of two dozen US representatives in May called for the Securities and Exchange Commission to halt Shein's planned initial public offering until it verifies it does not use forced labor.

A separate group of lawmakers on the Select Committee on the Chinese Communist Party sent a letter to Shein in May citing forced labor concerns and its use of de minimis. The company has denied using forced labor and previously said it is voluntarily cooperating with the Committee as it is "committed to respecting human rights and adhering to local laws and regulations in each market” it operates in.



Italian Prosecutors Probe Supply Chain of Around a Dozen Fashion Brands

This photograph shows Milan's skyline with the Unicredit Tower (CL) next to "Bosco Verticale" (Vertical Forest) residential tower (C), Unipol Tower (2R) at Porta Nuova district,  Milan, on June 6, 2024. (Photo by GABRIEL BOUYS / AFP)
This photograph shows Milan's skyline with the Unicredit Tower (CL) next to "Bosco Verticale" (Vertical Forest) residential tower (C), Unipol Tower (2R) at Porta Nuova district, Milan, on June 6, 2024. (Photo by GABRIEL BOUYS / AFP)
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Italian Prosecutors Probe Supply Chain of Around a Dozen Fashion Brands

This photograph shows Milan's skyline with the Unicredit Tower (CL) next to "Bosco Verticale" (Vertical Forest) residential tower (C), Unipol Tower (2R) at Porta Nuova district,  Milan, on June 6, 2024. (Photo by GABRIEL BOUYS / AFP)
This photograph shows Milan's skyline with the Unicredit Tower (CL) next to "Bosco Verticale" (Vertical Forest) residential tower (C), Unipol Tower (2R) at Porta Nuova district, Milan, on June 6, 2024. (Photo by GABRIEL BOUYS / AFP)

Prosecutors in Milan are investigating the supply chain of around a dozen more fashion brands, a person with knowledge of the matter said, after a unit of France's LVMH in Italy was placed under court administration in a worker exploitation probe.
On Monday, a Milan court appointed a commissioner to run an LVMH-owned maker of Dior-branded handbags after an investigation into four of its suppliers based in the surroundings of Italy's fashion capital uncovered illegal working conditions for staff.
On-site inspections and checks on electricity usage data led prosecutors to allege workers were employed for extended hours, working often into the night and during holidays. Some of the staff slept where they worked, had no regular contracts, with two having illegally immigrated into Italy.
This is the third such decision this year by the Milan court in charge of pre-emptive measures, which in April took similar steps in relation to a company owned by Giorgio Armani due to accusations the fashion group was "culpably failing" to properly oversee its suppliers. Armani Group said at the time it had always sought to "minimize abuses in the supply chain".
LVMH on Monday declined to comment on the court's decision.
Milan prosecutors and Italian police are investigating further small manufacturers that supply around a dozen other brands, the person told Reuters, declining to provide additional details because the information is confidential.
The appointment of a special commissioner is intended to give the fashion brands' subsidiaries time to fix problems in their supply chain while continuing to operate.
Neither LVMH nor Armani are under investigation, while the suppliers targeted by the probe face accusations of worker exploitation, copies of the court decisions seen by Reuters showed.
'MADE IN ITALY'
Milan prosecutors have been investigating for the past decade recruitment firms that allegedly illegally employed workers, evading taxes, as well as welfare and pension contributions, to slash the cost of the services they supplied.
The probes traditionally targeted sectors such as logistics, transportation and cleaning services, where workers were supplied by firms that sprung up and were wound down every couple of years.
The focus then shifted onto the fashion sector, where probes have highlighted similar problems this year.
Italy accounts for 50% to 55% of the global luxury goods production, consultancy Bain calculated, with thousands of small manufacturers supplying big brands and allowing them to sport the prized 'Made in Italy' label on their goods.
The latest Milan investigation has shown a small manufacturer was able to charge Dior as little as 53 euros ($57) to make a handbag, which the fashion house then sold in shops at 2,600 euros.
Under Italian law, brands outsourcing production are responsible for carrying out adequate checks on suppliers.
In the past, the measures taken by Italian magistrates in relation to worker exploitation probes concerned only the suppliers who mistreated workers.
However, Milan prosecutors have been able to make use of a provision in the law that was originally designed to deal with companies infiltrated by the Mob.
These companies would be placed under court, or judicial, administration through the appointment of special commissioners to run them.