Singapore-based online fashion retailer Shein saw its shares crash to a record low in Hong Kong after second-quarter profits plunged 66 per cent.
In its first financial results since listing on the Hong Kong stock market on September 1, the Chinese fast fashion company reported that second-quarter profits dropped to £173 million, down 66 per cent from the same period a year earlier.
Shares in the business slipped by as much as 14 per cent following the announcement, taking total losses since its stock market debut to nearly 40 per cent. A stock market listing exposes corporate financial performance to immediate scrutiny from global investors.
Rising shipping costs and trade barriers
Shein attributed the sharp drop in earnings to difficult external trading conditions. The retailer blamed the fallout from the Iran war alongside new import duties as authorities in the United States and the European Union clamp down on cheap goods brought in from China.
Xu Yangtian, the chairman and founder of Shein, said the slump was "primarily driven by a sharp spike in oil prices and freight rates amid Middle East geopolitical tensions."
Fast fashion retailers rely heavily on rapid supply chains and international air freight to move goods from manufacturing centers to global shoppers. Higher oil prices increase transport costs, while import duties raise the price of foreign goods entering overseas markets.
Market reaction and analyst perspective
Financial analysts commented on the retail group's performance as it navigated its initial weeks as a publicly traded company on Asia's financial markets.
Susannah Streeter, chief investment strategist at Wealth Club, said: "Shein has taken another stumble on the global retail catwalk."
Wealth Club is an investment service and financial advisory firm based in the UK that provides research for private investors. The Hong Kong Stock Exchange is one of Asia's largest equity markets for major corporate stock listings.
Looking ahead, company management warned that difficult market conditions would persist. Xu Yangtian cautioned that "the external environment will remain uncertain in the second half of 2026" as freight rates and regulatory pressures continue to impact global e-commerce operations.
