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Shein explores means to restructure its American activities in the event that the Trump administration sticks to punitive prices on Chinese imports, which have endangered its plans for a London stock market flotation.
The American activity of the rapid company – which represents approximately a third of its $ 38 billion in annual income – will be supported when a tax exemption known as “of Minmis” will be closed this week.
Who will leave SheinWho ships orders directly from Chinese warehouses to buyers' houses, paying 120% prices on cheap clothes it sells to customers in the United States, its largest market.
Two people knowing the company's deliberations said that a bypass solution was considered to divert the production of the American market to countries outside of China. While the majority of the Shein supply chain is located in China, the company has a certain manufacturing capacity in other countries, including Brazil and Turkey.
However, its supply chain capacity in these countries is limited and it is doubtful that it is reaching a scale to match Shein's operations in China, where it has 7,000 suppliers. The change of production elsewhere would lead to a significant reduction in supply to American activities in Shein, according to the initiates of the industry.
Any effort to deal with President Donald Trump price Leaving the manufacture of China, could also attract the anger of the government.
According to Bloomberg, the Chinese Ministry of Commerce has discouraged Shein and other exporters to move supply chains to other countries. Shein previously said that he did not take the ability of the supply chain outside of China.
Sources familiar with Shein's thought have said that no decision on the American restructuring had been made at the level of the board of directors. Despite the risk for its sales, Shein benefited from a healthy assessment thanks to its business model in light of assets, they added.
If the prices inflicted sustainable damage to American business in Shein, the company would be forced to postpone its broad IPO of LondonInitially planned for the first half of this year.
“Internally, we all focus on how to manage the tariff situation for the moment. Before clarity on this subject, no one can even start thinking about the IPO,” said a framework that refused to be appointed due to the sensitivity of the problems. Shein refused to comment.
Shein has increased prices up to 377% on certain products in the United States – such as hair links – before the implementation of higher prices. However, through its core clothing, most price increases have been much lower.
Shein leaders closely monitor geopolitical developments and hope that negotiations between Washington and Beijing could bring the prices to an acceptable level.
The rapid growth of Shein, led by its Sky Xu co-founder, was activated by exemptions from import rights on low-value plots arriving in the United States and Europe. The EU and the United Kingdom have both preparations started To put an end to their respective low -value import diagrams.
The United States replaces its exemption of “minimis” – which applied to shipments of a value of less than $ 800 – by a rate of 120%, or costs of $ 200, depending on how the goods are delivered. The changes will apply to shipments from China and Hong Kong.
In April, Shein's American revenues were strong because customers bought goods in anticipation of changes, said an initiate. Another person close to Shein said he was confident that he could resist modifications to the American rules of minimis.
Additional report by Eleanor Olcott in Beijing
