Italian antitrust officials opened an investigation into Shein, saying the online fast-fashion giant might be making misleading claims about the sustainability of the clothing it sells.
The Singapore-based group stormed the fashion industry with its ultracheap clothes and a business model that created fierce competition for the likes of Sweden’s H&M and Spain’s Zara owner Inditex.
Shein works with thousands of factories, mostly in China, through an on-demand business model: It places small orders with suppliers and replenishes its stock as needed based on demand, resulting in lower inventory costs compared to its peers.
However, the sustainability of its business practices came under intense scrutiny in recent months. Critics argue that fast-fashion companies like Shein promote excessive consumption, hurting the environment.
The Italian Competition Authority said it launched a probe into Infinite Styles Services Co., Shein’s Italian website operator, over what officials said were potentially misleading environmental claims. This comes at a time of growing awareness among consumers of the impact their clothing choices can have.
The watchdog said Shein might be seeking to portray itself as a sustainable maker and seller of garments through generic, vague and even misleading claims about product quality and responsible consumption.
Read more here from the Wall Street Journal.
