It’s published
Italy’s Competition Bureau (AGCM) announced on Monday it has issued fast fashion company Shane with a fine of 1 million euros for “misleading environmental messages and claims.”
Authorities have given the fines Infinite Styles Services Co. Limited, a Dublin-based company that manages Shane’s website in Europe.
“Through its website https://it.shein.com and other promotional and/or information online pages, we have spread environmental claims within the sections by #sheinthe, evolushein, and ambiguous, general and/or overemphasizing social liability, and others, falsely committed or incorrectly measured,” Agcm said.
In particular, the AGCM criticized the “circulation system” to minimize waste that “produced false or at least confused” the claims of recyclability and its “circulation system.”
Italian officials also challenged Shane’s statement regarding greenhouse gas emission targets. The company claims it aims to reduce emissions by 25% by 2030, and says it hopes to reach net zero by 2050. The AGCM states that these proposals are “ambiguous and general” and “contradict the actual increase in greenhouse gas emissions in the 2023 and 2024 scene.”
The AGCM is the second European competition authorities to fine-tune Shane in just a month after the French anti-trust agency issued the company with a penalty of 40 million euros in July.
An 11-month study by the DGCCRF found that Shane was engaged in “misleading commercial practices for consumers,” particularly “the realities of granted price reductions and the scope of commitments to environmental claims.”
Sheen said he accepted the fine and took steps to correct the violation after being notified by regulators last year.
Keep the price low
The company has not published any revenue updates, but sources familiar with the company said that in the first quarter, the company’s net profit rose to $400 million (EUR 346 million) and revenue rose to nearly $10 billion (EUR 8.6 billion). Sources say Shane’s profit margins have been raised by clients rushing to preempt tariffs from the US administration.
Retailers set in China have built a strong consumer base by providing ultra-stable products, despite scrutiny environmental and labor practices.
The latter has significantly slowed down their ambition to launch an IPO (initial public offering) in London. According to the report. Sheen submitted a list to the UK capital more than a year ago, but China and UK regulators disagreed with the language included in the risk disclosure section of the prospectus, particularly when it relates to human rights violations.
Shein Faces claims to source cotton from China’s New Jiang region. There, the US and NGOs are denounced by the Chinese government for forced labor and human rights violations targeting Uyghur people.
With a hold-up in London, the Financial Times first reported last month that the retailer had secretly applied for an initial public offering (IPO) in Hong Kong.
Shane is also under scrutiny from the European Commission, which opened a probe relating to Shane’s potential violation of the EU Consumer Protection Regulations and Digital Services Act.
Shein did not immediately respond to Euronows’ request for comment.