Fast-Fashion Giant Shein Plans U.S. Expansion as Sales Climb
Shein, the online retailer that has turbocharged the global fast-fashion industry, is planning to deepen its foothold in the U.S. as its sales to American shoppers continue to soar.
The company is planning to build three large distribution centers in the U.S. that could eventually reduce shipping times for its customers by three to four days, George Chiao, president of Shein’s U.S. operations, said in an interview. It is also planning a hiring spree in the country over the next few years, he said.
Shein, a privately held business known for extremely low-priced and trendy apparel and accessories, hasn’t disclosed its recent sales figures. The decade-old company was valued at $100 billion in a funding round earlier this year after it raised money from global investors.
Simon Irwin, a London-based retail analyst at
Credit Suisse,
recently estimated that Shein had about $16 billion in sales last year. Global fast-fashion giant Zara, which sells apparel and home goods in stores and online, generated net sales of €19.6 billion, or $19.5 billion, in the fiscal year ended Jan. 31, according to its parent
Inditex SA
. Zara’s sales jumped 29% to €10.9 billion in the six months to July 31, Inditex said this week.
Shein sells exclusively online and currently ships its merchandise from China to more than 150 countries. The U.S. is one of Shein’s biggest markets, accounting for about a quarter of the company’s gross merchandise value, Mr. Chiao said.
Currently, Shein’s customers need to wait 10 to 15 days for their orders to be delivered, according to the company’s U.S. website. That is a far cry from the average shipping times of retailers such as
Amazon.com Inc.
and rivals such as Zara and H&M that have leaned on their physical stores to help fulfill e-commerce orders quickly. Shein said packages sent via standard shipping are actually delivered within seven to eight days on average.
Shein garments produced at factories such as this one in Guangzhou, China are shipped to more than 150 countries.
Photo:
jade gao/Agence France-Presse/Getty Images
Shein opened its first U.S. distribution center in Whitestown, Ind., in April and is expanding its area to 1.5 million square feet, from 1 million square feet currently.
The company is planning to open a second, 1.8-million-square-foot distribution center in southern California by the spring of 2023. The two centers combined would employ about 3,000 people by 2025, Mr. Chiao said. The majority of the new hires will be directly employed by Shein, while others would be contract workers. A third distribution center is being planned for the Northeast, he said.
The retailer is also planning to hire at least several hundred employees at its U.S. corporate headquarters in Los Angeles, its Washington, D.C., office and potentially in other American cities. Shein now has more than 400 staffers in the U.S., up from 15 in 2019.
“We should have probably well over several thousand employees in the U.S. by 2025,” Mr. Chiao said.
Shein’s long fulfillment times have frustrated some shoppers and could become a hurdle as the company tries to sell more higher-price products with fatter profit margins. Last year, Shein launched a premium label called MOTF, which has silk dresses priced at more than $100 and garments made from cotton and wool.
“I don’t think you can sell products with midmarket pricing with a 10-day lead time,” said Mr. Irwin of Credit Suisse.
Shein said it has been shipping its merchandise overseas by air as well as via ocean freight, and the company is trying to identify more products that can be shipped economically by sea, or even sourced from locations that are closer to customers.
Write to Jing Yang at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Shein, the online retailer that has turbocharged the global fast-fashion industry, is planning to deepen its foothold in the U.S. as its sales to American shoppers continue to soar.
The company is planning to build three large distribution centers in the U.S. that could eventually reduce shipping times for its customers by three to four days, George Chiao, president of Shein’s U.S. operations, said in an interview. It is also planning a hiring spree in the country over the next few years, he said.
Shein, a privately held business known for extremely low-priced and trendy apparel and accessories, hasn’t disclosed its recent sales figures. The decade-old company was valued at $100 billion in a funding round earlier this year after it raised money from global investors.
Simon Irwin, a London-based retail analyst at
Credit Suisse,
recently estimated that Shein had about $16 billion in sales last year. Global fast-fashion giant Zara, which sells apparel and home goods in stores and online, generated net sales of €19.6 billion, or $19.5 billion, in the fiscal year ended Jan. 31, according to its parent
Inditex SA
. Zara’s sales jumped 29% to €10.9 billion in the six months to July 31, Inditex said this week.
Shein sells exclusively online and currently ships its merchandise from China to more than 150 countries. The U.S. is one of Shein’s biggest markets, accounting for about a quarter of the company’s gross merchandise value, Mr. Chiao said.
Currently, Shein’s customers need to wait 10 to 15 days for their orders to be delivered, according to the company’s U.S. website. That is a far cry from the average shipping times of retailers such as
Amazon.com Inc.
and rivals such as Zara and H&M that have leaned on their physical stores to help fulfill e-commerce orders quickly. Shein said packages sent via standard shipping are actually delivered within seven to eight days on average.
Shein garments produced at factories such as this one in Guangzhou, China are shipped to more than 150 countries.
Photo:
jade gao/Agence France-Presse/Getty Images
Shein opened its first U.S. distribution center in Whitestown, Ind., in April and is expanding its area to 1.5 million square feet, from 1 million square feet currently.
The company is planning to open a second, 1.8-million-square-foot distribution center in southern California by the spring of 2023. The two centers combined would employ about 3,000 people by 2025, Mr. Chiao said. The majority of the new hires will be directly employed by Shein, while others would be contract workers. A third distribution center is being planned for the Northeast, he said.
The retailer is also planning to hire at least several hundred employees at its U.S. corporate headquarters in Los Angeles, its Washington, D.C., office and potentially in other American cities. Shein now has more than 400 staffers in the U.S., up from 15 in 2019.
“We should have probably well over several thousand employees in the U.S. by 2025,” Mr. Chiao said.
Shein’s long fulfillment times have frustrated some shoppers and could become a hurdle as the company tries to sell more higher-price products with fatter profit margins. Last year, Shein launched a premium label called MOTF, which has silk dresses priced at more than $100 and garments made from cotton and wool.
“I don’t think you can sell products with midmarket pricing with a 10-day lead time,” said Mr. Irwin of Credit Suisse.
Shein said it has been shipping its merchandise overseas by air as well as via ocean freight, and the company is trying to identify more products that can be shipped economically by sea, or even sourced from locations that are closer to customers.
Write to Jing Yang at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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