Fast-fashion retailer Shein has big plans for the future, and it's not afraid to make some controversial changes along the way to accomplish those goals.
In the midst of its alleged ambitions to pursue an initial public offering, or IPO, in the U.S., with a reported valuation of around $66 billion, the company has quietly made several adjustments to the prices of its products, which are famous for being very affordable, that customers may not like.
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Shein reportedly hiked prices on over a third of its items for sale between June 1 and last year, according to data from research firm Edited, according to a recent report by Reuters. The average price hikes have even surpassed increases at competitors H&M and Zara.
The data also revealed that in the U.S., Shein increased the average price of its women’s dresses to $28.51, which is 28% more than the average last year. Also, the average pair of shoes on Shein’s website is now $40.70, a stark increase from the $25.30 in 2023.
Shein battles toxic chemicals in its products
As Shein hikes prices, the online retailer was recently flagged by authorities in Seoul, South Korea, last month for having high levels of toxic chemicals in several of its products, including items for children.
After inspecting 93 of Shein’s products, Seoul authorities found that half of them were made with toxic chemicals such as phthalates, which can potentially cause cancer and disrupt hormones when absorbed through the skin.
The revelation came after a 2022 report by Greenpeace revealed that formaldehyde, a highly toxic and colorless flammable gas, was found in “a baby girl’s dress” sold on Shein’s website. The report also found “very high levels” of phthalates in various shoe products that were sold by the company.
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Shein's profits skyrocket as it increases its prices
Amid recent price hikes, Shein has also reportedly boosted its revenue growth significantly last year.
According to a recent report from The Information, Shein raked in $32.2 billion in sales in 2023, which is a 40% increase from what it made the year before.
The company’s net income, or total earnings after expenses, also reportedly doubled to $1.6 billion. That means the company boosted its net profit margin by 5%, up from the 3.5% it had in 2022, according to The Information.
Shein's recent price increases could further pad its profits, making the company more interesting to investors but less affordable to shoppers.
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