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:

An aerial view of San Francisco

Trump may have inadvertently invited a wave of climate action from blue states

The administration’s decision to rescind the Obama-era endangerment finding undercuts its own legal arguments against state-level climate superfund laws.
A refinery with smokestacks silhouetted against a sunset sky

Washington takes another step to link its carbon market with California and Quebec

Washington’s cap-and-trade program could soon link with carbon markets in California and Quebec, a move that agency officials say would decrease and stabilize decarbonization costs.

A gavel sitting on a judge's desk

The Supreme Court case that could end local climate suits

Nearly a dozen states are suing the oil and gas industry over climate. The fossil fuel industry is pushing back.
A toddler reaching up to a pantry shelf where jars of non perishable food is stored

Prepping for a disaster? You’ll probably want to pack a little treat

It’s not just sardines and dried beans. Self-identified preppers are also stashing luxuries like coffee and chocolate.
House on stilts precariously positioned next to ocean in Rodanthe, North Carolina

Study says millions more are exposed to rising seas than thought

A new study in the journal Nature says most sea level rise research may have underestimated coastal water heights by an average of 1 foot or about 30 centimeters.
Massive fire explosion close up in military combat and war. Vehicle explosion from a tank in a city in the Middle East.

War and uncertainty cloud Trump’s AI pledge rollout

Even without war, experts in energy markets expressed doubt that the tech companies’ promises can check fast-rising electricity prices.
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.