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Chinese Fast-Fashion Giant Shein Aims to Be More Sustainable

Executive Vice Chairman of Chinese fast-fashion retailer Shein, Donald Tang, talks to public during the World Retail Congress in Barcelona, Spain April 25, 2023. (Reuters)
Executive Vice Chairman of Chinese fast-fashion retailer Shein, Donald Tang, talks to public during the World Retail Congress in Barcelona, Spain April 25, 2023. (Reuters)
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Chinese Fast-Fashion Giant Shein Aims to Be More Sustainable

Executive Vice Chairman of Chinese fast-fashion retailer Shein, Donald Tang, talks to public during the World Retail Congress in Barcelona, Spain April 25, 2023. (Reuters)
Executive Vice Chairman of Chinese fast-fashion retailer Shein, Donald Tang, talks to public during the World Retail Congress in Barcelona, Spain April 25, 2023. (Reuters)

Chinese fast-fashion retailer Shein plans to become more focused on sustainability, Executive Vice Chairman Donald Tang said on Tuesday, adding that consumers are no longer just concerned about affordability.

Shein sells $10 dresses and $5 tops and has taken market share from other affordable fashion retailers. The company produces clothing in China to sell online in the United States, Europe and Asia and has been criticized for promoting throwaway fashion.

"Consumers these days are no longer looking just at price: in the next phase to continue to grow you need to have ESG in mind," Tang said at the World Retail Congress in Barcelona.

ESG, an acronym for environmental, social, and governance, is a term used to describe corporations' efforts to be more responsible.

Tang said that Shein is offering customers an option to pick higher-quality materials and pay a premium for them for certain items.

He also mentioned Shein Exchange, the company's platform where shoppers can resell used clothes, which launched in the US in October and aims to start in other markets this year.

Shein continues to grow "very robustly", Tang said, and regularly has less than 2% of unsold inventory.

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Fashion

Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
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Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)

Kering reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half, as the French luxury group struggles to revive its key label Gucci and worries grow about a prolonged downturn in high-end spending.

Sales at the French luxury group which owns labels Gucci, Boucheron and Balenciaga, fell to 4.5 billion euros ($4.9 billion), an 11% drop on an organic basis, which strips out currency effects and acquisitions.

The figure was below analyst expectations for a 9% drop, according to a Visible Alpha consensus.

It also said second-half operating income could fall by around 30%, following a 42% drop in the first half.

Sales at Gucci fell 19%, showing no improvement from the first quarter, and below analyst expectations for a 16% decline, according to a Visible Alpha consensus.

Kering has been revamping Gucci, the century-old Italian fashion house which accounts for half of group sales and two-thirds of profit.

Minimalist designs from new creative director Sabato de Sarno, which began trickling into stores earlier this year, are key to the design reset and push upmarket, in a bid to cater to wealthier clients who are more immune to economic headwinds.

Kering chief financial officer Armelle Poulou told reporters that the designs had been well received and the rollout was on track.

But the efforts have been complicated by a downturn in the global luxury market, while China's rebound - traditionally Gucci's most coveted market - was clouded by a property crisis and high youth unemployment as Western markets came down from a post-pandemic splurge.

Earnings from sector bellwether LVMH on Tuesday missed expectations as sales rose 1%, offering few signs that a pickup is around the corner, sending shares in luxury goods companies down on Wednesday. Kering traded at its lowest level since 2017.