(c) Reuters. REUTERS/Chen Lin/File Photo
By Arriana McLymore
NEW YORK (Reuters) -Republican attorneys general from 16 U.S. states asked the Securities and Exchange Commission to audit China-founded fast fashion retailer Shein’s supply chain for the use of forced labor ahead of its potential initial public offering. REUTERS/Chen Lin/File Photo
By Arriana McLymore
NEW YORK (Reuters) -Republican attorneys general from 16 U.S. states asked the Securities and Exchange Commission to audit China-founded fast-fashion retailer Shein’s supply chain for the use of forced labor ahead of its potential initial public offering.
Amid rising friction between Washington and Beijing, the letter, sent to the SEC last week, added to pressure on Shein as China hawks in Congress target Chinese firms that do not align with U.S. foreign policy goals. Shein, a company that sells $7 dresses in 150 countries and $5 home products, moved its headquarters from Singapore to China but still manufactures the majority of its goods. The letter urged SEC to ensure Shein, as well as other foreign companies listed in U.S. exchanges, verify that they comply with U.S. law that prohibits imports made using any forced labor. Shein will continue to work with U.S. state and federal officials to provide answers to their questions, a spokesperson for the company said. Shein declined to make any comments on its IPO plan.
Reuters reported that Shein had been working with three investment banks to prepare for a possible U.S. Initial Public Offering and was in discussions with the New York Stock Exchange (NYSE) and Nasdaq. This information came from people who were familiar with the situation. Shein opened a warehouse near Indianapolis in 2022 to speed up deliveries and meet the growing demand in the U.S. According to a source with knowledge of the situation, it expanded by 302,000 sq ft or 20% in this month. It now occupies nearly 1.8m sq ft. The letter was not signed by Republican Indiana State Attorney General Todd Rokita. In May, a group of two dozen U.S. Representatives sent a letter similar to this one to the SEC, asking it to halt a possible Shein IPO unless the company confirms that it doesn’t use forced labor.