A fast-fashion retailer that has taken global e-commerce by storm is reportedly facing dozens of lawsuits accusing it of copyright infringement.
Shein, which was founded in China in a decade and a half ago and now apparently has aspirations to list shares on Wall Street, has had nearly 100 copyright cases filed against it to date, according to a Friday report in the Financial Times that cited legal filings.
The company, which sells fashion items at eye-catchingly low prices, has regularly faced criticism for allegedly allowing its vendors to copy the designs of other companies and sell items at dramatic discounts to their lookalikes.
Reports emerged late last year that Shein had confidentially filed to go public and had been valued at $66 billion in a fundraising round last May. A U.S. listing could be the biggest for Wall Street in several years.
Reuters reported last month that Shein was working to get Beijing’s approval for a U.S. listing. Citing sources, the report said, though, that there had been no response from the U.S. Securities and Exchange Commission to Shein’s reported plan.
Some U.S. lawmakers have voiced opposition to a Wall Street welcome for Shein, which has also faced criticism over ethical and environmental issues. Last year, a bipartisan group of lawmakers demanded a halt to any IPO consideration by the Securities and Exchange Commission until Shein can prove it doesn’t rely on forced labor. Shein has rebutted allegations that it does.
“Shein’s lack of transparency, seemingly illegal business practices and allegations of unethical conduct, like IP theft, may be OK in Communist China but won’t fly in the United States,” Senate Republican Rick Scott of Florida reportedly told the FT.
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According to Open Secrets, which tracks lobbying expenditures, Shein spent $230,000 on lobbying in the U.S. in 2022 and then $2.1 million in 2023.
A Financial Times analysis found that 93 U.S. lawsuits had been filed against Shein since 2018 with 30 new ones added last year alongside as legal action elsewhere. Japan-based Uniqlo, owned by Fast Retailing
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filed a lawsuit against rival Shein last month over its trademark Round Mini Shoulder Bag.
In a comment to MarketWatch, a Shein representative said the company takes seriously any infringement claims.
“We are continually investing in our review process and, as a result, have seen a substantial decrease in claims. We are committed to driving industrywide advancement. SHEIN suppliers and third-party sellers are required to comply with company policy and certify their products do not infringe third-party IP,” said the spokesperson.
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