Shein’s falling profits reveal cracks in ultra-fast fashion business model

Slowing profits and mounting legal challenges suggest Shein’s breakneck growth is stalling as regulators and consumers demand more accountability from fast fashion brands.

Daphne Chouliaraki Milner reports for Atmos.


In short:

  • Shein’s profits dropped nearly 40% in 2024, forcing the company to slash its valuation ahead of a planned IPO in London. Meanwhile, its sales continue to grow.
  • The company faces increasing scrutiny over labor practices, pricing deception, and products found to contain hazardous chemicals like phthalates, PFAS, lead, and formaldehyde.
  • Broader market signals suggest a shift: Other ultra-fast fashion brands are also seeing earnings drops as public pressure and regulation begin to take hold.

Key quote:

“Companies like Shein thrive on overproduction and rock bottom prices, but I really think that this decline signals that their model isn’t as bulletproof as it once seemed. Regulatory scrutiny is getting better and shoppers are getting smarter.”

— Katrina Caspelich, chief marketing officer of Remake

Why this matters:

Fast fashion, once hailed as a democratizing force in global style, is now facing a reckoning as its hidden costs become harder to ignore. Behind the racks of $5 shirts and micro-trends lies an industrial machine that churns out billions of garments annually, often under conditions that harm both people and the planet. Factories, many based in countries with weak labor protections, have come under fire for grueling hours, poor wages, and exposure to hazardous chemicals used to dye and finish garments. Those same chemicals have been found in finished products, raising concerns about what consumers, especially children, might be absorbing through their skin.

The environmental toll is staggering, with textile dyeing ranked among the largest sources of water pollution globally and synthetic fibers shedding microplastics into waterways. While brands like Shein have ridden a wave of viral popularity, their rapid, opaque supply chains are now drawing scrutiny from U.S. and European regulators, who are exploring tougher oversight. As public awareness grows and watchdog groups highlight these links between fast fashion and toxic exposures, the industry’s low-cost, high-speed model may face limits it can’t ignore.

Learn more:

A river flowing between dry rocky bluffs

Experts warn Colorado River crisis demands immediate water cuts across the West

With reservoirs at less than one-third capacity, researchers say the Colorado River could reach dangerously low levels after another dry winter unless the federal government and seven Western states act quickly to reduce water use.

An air conditioning unit mounted on a wall.

A/C saves lives during heat waves. Will Los Angeles require it for rentals?

With extreme heat intensifying due to climate change, Los Angeles Councilmember Eunisses Hernandez is pushing for a citywide indoor temperature threshold that would require landlords to provide renters with cooling options.

A factory or power plant with smokestacks emitting pollution

Trump's EPA plans to stop making companies report their emissions

The EPA has proposed rescinding its long-standing greenhouse gas reporting program, which tracks emissions from thousands of facilities nationwide. Critics warn the move would blind policymakers, states, and the public to the true scale of climate pollution.

A breadfruit tree with three breadfruits hanging on a branch

Can this tree still save us? In some places it's barely hanging on

Long hailed as a climate-resilient staple, breadfruit is shrinking and failing in the Marshall Islands as heat, drought and saltwater intrusion batter trees and taint groundwater.

A hand reaching for cheese puffs in a white bowl

MAHA has a climate change blind spot

Health Secretary Robert F. Kennedy Jr.’s “Make Our Children Healthy Again” plan promises action on toxics and food additives but ignores climate change, which scientists warn is the greatest health threat of our time.

Smiling people with signs marching in support of science.
Credit: Vlad Tchompalov/Unsplash

Judge allows Trump to cut more than $1bn in National Science Foundation grants

Court declined preliminary injunction in case brought by scientists seeking to halt purge of more than 1,600 grants.

A blue and white ship at sea with LNG written on the side of it.
Credit: BNK Naval Photographer/Big Stock Photo

Wright and Burgum urge Europe to rethink methane curbs

A new EU rule will restrict imports that exceed strict limits on methane emissions. That could be a problem for American LNG exports.
From our Newsroom
Multiple Houston-area oil and gas facilities that have violated pollution laws are seeking permit renewals

Multiple Houston-area oil and gas facilities that have violated pollution laws are seeking permit renewals

One facility has emitted cancer-causing chemicals into waterways at levels up to 520% higher than legal limits.

Regulators are underestimating health impacts from air pollution: Study

Regulators are underestimating health impacts from air pollution: Study

"The reality is, we are not exposed to one chemical at a time.”

Pennsylvania governor Josh Shapiro speaks with the state flag and American flag behind him.

Two years into his term, has Gov. Shapiro kept his promises to regulate Pennsylvania’s fracking industry?

A new report assesses the administration’s progress and makes new recommendations

silhouette of people holding hands by a lake at sunset

An open letter from EPA staff to the American public

“We cannot stand by and allow this to happen. We need to hold this administration accountable.”

wildfire retardants being sprayed by plane

New evidence links heavy metal pollution with wildfire retardants

“The chemical black box” that blankets wildfire-impacted areas is increasingly under scrutiny.

Stay informed: sign up for The Daily Climate newsletter
Top news on climate impacts, solutions, politics, drivers. Delivered to your inbox week days.