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:

Chase Bank business front.

World’s largest banks pledged $906bn to fossil fuel companies in ‘unfathomable’ increase in 2025, report finds

JPMorgan Chase leads 65 banks making decisions incompatible with restraining rising temperatures, researchers say.

Man in white hard hat and blue shirt installing solar panels

The Iran war is forcing energy-importing countries to turn inward

The Iran war is pushing countries to prioritize domestic energy in order to protect themselves from volatile oil and natural gas markets.
Coal-burning power plant emitting air pollution against an orange sky
Credit: Faux Toe/BigStock Photo ID: 1366970

North Carolina bill would prop up coal until new nuclear is approved

The Republican-backed house passed the Ratepayer Protection Act, which could rein in some data center costs but extend the life of costly old coal plants.
A JSL submersible offers a panoramic view of the underwater world.
Credit: NOAA/Unsplash

Alaskans reel from the loss of National Science Foundation ocean-monitoring instruments

In the nation’s fastest-warming state with a multi-billion-dollar fishing industry and storm-threatened coastal communities, scientists say the federal government’s decommission of a deepwater sensor system is ill-timed and wrong-headed.
  Save Download Preview Lighted vigil light candle with the miner belongings (helmet, gloves, pickaxe, vest, belt) after the fatal accident in the mine
Credit: Adam88x/BigStock Photo ID: 258952000

Trump DOJ killed criminal probe of Sen. Jim Justice’s Southern Coal

EPA and Justice Department officials were looking into potential criminal violations by the vast coal empire owned by Sen. Jim Justice. Then the Office of the Deputy Attorney General told them “pencils down.”
Ocean floor with light filtering through
Credit: Rich Carey/BigStock Photo ID: 97657196

Ping-pong sponges, ‘black smokers’ and floating somethings: the secrets of the deep sea

The long read: The bottom of the ocean has barely been explored, but every journey to the deep reveals wondrous new lifeforms. As underwater mining gains momentum, we risk destroying one of the Earth’s last great wildernesses.

Image of a blue donkey facing off with a red elephant with an American flag in between

Democratic governors chafe as calls grow louder to reject data centers

State leaders are rolling out energy and environmental guardrails for data centers as politics heat up over the sprawling AI campuses.
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.