Shein discloses FTC probe in US, warns of significant payments

Published Jul 28, 04:20 PM UTC

Shein, the online fast-fashion retailer, disclosed that its U.S. operations are under investigation by the U.S. Federal Trade Commission (FTC) for consumer protection issues, warning of potentially significant monetary payments that could materially affect its financial condition. The disclosure was made in documents filed for its planned Hong Kong IPO. Shein is cooperating with the probe, which was confirmed by an FTC spokesperson. The company did not specify the reason for the investigation. Shein shifted its IPO plans to Hong Kong after supply-chain risk disclosures, including language about Uyghur forced labor, became obstacles in New York and London. Shein denies forced labor in its supply chain but previously reported two cases of child labor in 2023 and 2024. The company also faces scrutiny from Texas Attorney General Ken Paxton and recently settled a lawsuit over shipping delays. Shein revealed it swung to a quarterly loss, partly due to the U.S. removal of the de minimis tariff exemption on small packages.