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:

 21st session of the UN Conference on Climate Change Paris 2015
Copyright: palinchak/BigStock Photo ID: 110010617

Paris Agreement 10 years on: More wins than you may realize

Global emissions continue to rise a decade after the Paris Agreement. However, solar, wind and EV growth demonstrate that climate action can work. Here's what has been achieved and what remains urgent.
Offshore oil drilling platform
Credit: Photo by Zach Theo on Unsplash

An oil company running into rough waters off the California coast is looking to Trump for help

A vote to deny Sable Offshore permits to restart production builds on a series of lawsuits and an accusation of insider trading, but the CEO wants the president to help it overcome its setbacks.
A machine digging a trench for a pipeline alongside an agricultural field.
Credit: Getty Images/Unsplash+

Property battles could slow Trump’s pipeline ‘tsunami’

Resistance from landowners is visible across the country as companies pursue new oil, gas and carbon projects.
Oil fields at sunset (or sunrise)
Credit: Getty Images For Unsplash+

There’s a new forecast for peak oil demand. It’s increasingly cloudy.

The International Energy Agency once projected that oil and gas demand could level off by 2030. Now it’s backing off, sort of.
Asheville, North Carolina downtown mural on building
Credit: Photo by PJ Frederick on Unsplash

Why Appalachia is one of the world’s worst hotspots for dangerous floods

A Washington Post investigation shows why one region of the United States is increasingly vulnerable to extreme rainfall and floods.
A river flowing between dry rocky bluffs
Credit: Anton Foltin/Big Stock Photo

States that rely on the Colorado River miss deadline to agree on cuts

A plan to sustainably manage the shrinking waterway could soon be up to the Trump administration — or eventually the Supreme Court.
data center construction
Credit: MaxSafaniuk/BigStock Photo ID: 438562529

If the US has to build data centers, here’s where they should go

A new analysis tries to calculate the coming environmental footprint of AI in the US and finds that the ideal sites for data centers aren’t where they’re being built.
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.