Fast-fashion giant Shein's shares fall after Hong Kong trading debut that spotlights its China roots

HONG KONG (AP) — Shares in fast-fashion online retail giant Shein lost around 10% after it began trading on Hong Kong’s stock market Tuesday, after a long delay in the company’s plans to list its shares publicly. “Shein's Hong Kong listing marks a new starting point,” said Leigh Gui, Shein's chief financial officer, in a short speech at its listing ceremony.But in early trading, the shares fell to around HK$44.Shein’s appeal to customers has been built on ultra-fast, affordable fashion, delivered from China to the West in just days. The end of “de minimis” tariff exemptions in the U.S.

and the European Union has raised duties for low value parcels from China, including Shein’s products, as well higher logistics costs caused in part by the war in Iran, have squeezed the company’s low-price business model and profitability.Tariff costs have helped force Shein to raise prices, “cutting into its main advantage,” said Jacob Cooke, CEO of WPIC Marketing + Technologies.Shein recorded a $99 million loss in the first three months of this year, compared with a $395 million profit in the same period a year earlier.Earlier, Shein, pronounced “she-in,” explored listing its shares in New York and London. It moved its headquarters from China to Singapore around 2021. But increasingly strict scrutiny by Beijing as well as from regulators in the U.S.

and Europe led it to embrace its Chinese roots and switch to a listing in Hong Kong.Launched in 2012 in China, much of Shein's operations were in the southern province of Guangdong before it shifted its corporate headquarters out of the country.“Guangdong is Shein’s roots, and the starting point of our journey,” its founder Sky Xu said in a speech in February.Pivoting its focus back to China also highlighted the advantages Shein derives from the supply chain system that “only exists” in Guangdong, said William Ma at GROW Investment Group, referring to its small-batch, fast response manufacturing model.Shein has hit other roadblocks in expanding in Europe. In February, the EU launched a probe against Shein in February with a focus on “illegal” products, including alleged child sexual abuse material.In May, Shein acquired San Francisco-based eco-friendly clothing r…