Shein explores restructuring as rates threaten to derail the London IPO

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Shein is exploring ways to restructure his north -American business in the event that the Trump administration adheres to punitive rates to Chinese imports, which have jeopardized their plans for a London stock market.

The US business of fast fashion company, which represents about a third of its $ 38 million in annual income – It will be under a strong tension when a fiscal exemption known as “Minimis” is closed this week.

Who will leave SheinSending orders directly from Chinese warehouses to buyers’ houses, paying 120 percent rates in cheap clothes that sells US customers, their largest market.

Two people who are aware of the company’s deliberations said that a solution was to divert the production of the North -American market to countries from outside China. While most Shein’s supply chain is in China, the company has some manufacturing capacity in other countries, including Brazil and India.

However, its supply chain capacity in these countries is limited and is doubtful to reach a scale to combine Shein’s operations in China, where it has a network of 7,000 suppliers. The change in production elsewhere would be a significant reduction in supply to the USA’s US business, according to the privileged in the industry.

Any effort to face President Donald Trump rates When moving China’s manufacture, it could also attract the anger of government.

According to Bloomberg, the Chinese Ministry of Commerce has discouraged Shein and other exporters of moving supply chains to other countries. Shein has previously said that the capacity of the supply chain is not changing outside China.

Sources familiar with Shein’s thought said that no decision had been made on any US restructuring at the Council’s level. Despite the risk of sales, Shein had the benefit of a healthy balance thanks to his asset light business model, they added.

If rates caused lasting damage to Shein US business, the company would be forced to go back to its widely expected London IPOinitially scheduled for the first half of this year.

“Internally we are all focused on finding out how to deal with the fare at this time. Before we have clarity about it, no one can start thinking about the IPO,” said an executive who refused to be named because of the sensitivity of problems. Shein refused to comment.

Shein has increased prices by up to 377 percent in some of the United States products, such as hair ties, ahead of the implementation of higher rates. However, through their main clothing business, most price increases have been of much lower magnitude.

Shein’s executives closely follow geopolitical developments and expect negotiations between Washington and Beijing to reduce rates to an acceptable level.

Shein’s rapid growth, led by his co -founder Sky Xu, has been enabled for exemptions of import duty in low -value plots that reach the United States and Europe. The EU and the United Kingdom have both began the preparations To end their respective low value import schemes.

The USA replaces its “Minimis” exemption, which is applied to shipments worth less than $ 800, with a 120 percent rate, or a $ 200 flat rate, depending on the way they deliver goods. The changes will be applied to the shipments of China and Hong Kong.

In April, Shein’s United States revenue was strong, as customers bought products in anticipation of changes, he said a privileged one. Another person close to Shein said he was confident that he could withstand changes to the United States’ rules of Minimis.

Eleanor Olcott’s additional reports to Beijing