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:

Industrial power plant with smoke stacks under blue sky.

US succeeds in erasing climate from global energy body’s priorities

Trump’s energy chief had threatened to leave the International Energy Agency if it continued to focus on climate.
An oil tank truck driving down a highway

Inside the largest deregulatory action in US history

Can the government simply decide emissions aren’t its problem?
oil refinery emitting pollution under cloudy sky.

Trump's climate health rollback likely will hit vulnerable communities the most, experts say

The Trump administration’s revocation of a scientific finding that climate change is a danger to public health is likely to affect communities of color the most.
Demonstrators hold signs calling for racial justice.

Jesse Jackson's vision for America embraced environmental justice

The civil rights leader, who died earlier this week, linked segregation, pollution, and political power.
a gas station at night.

Paris court holds historic climate trial in case against TotalEnergies

The lawsuit challenges the oil major’s expansion plans and could set a significant precedent on climate responsibilities for fossil fuel companies if successful, advocates say.
the seal of the department of justice on a wall.

He was a climate activist. One day, the FBI came knocking

As the Trump administration cracks down on climate change activism, members of environmental groups like Extinction Rebellion fear they are being targeted.
a close up of a bunch of coffee beans on a branch

Climate change threatens coffee-growing regions

Human-caused climate change is adding weeks of extreme heat to major coffee-producing countries, damaging crops and reducing yields, according to new research.

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.