Shein, the online retailer that has turbocharged the global fast fashion industry, is planning to deepen its foothold in the US as its sales to American shoppers continue to grow.
The company is planning to build three large distribution centers in the U.S., which could eventually cut shipping times for its customers by three to four days, George Chiao, president of Shein’s U.S. operations, said in an interview. It is also planning a hiring spree in the country over the next few years, he added.
Shein, a privately held business best known for its ultra-affordable and fashionable clothing and accessories, has not released its latest sales figures. The ten-year-old company was valued at $100 billion in a funding round earlier this year after raising money from global investors.
Simon Irwin, a London-based retail analyst at Credit Suisse,
It recently estimated that Shein had about $16 billion in sales last year. Global fast fashion giant Zara, which sells clothing and home goods in stores and online, generated net sales of 19.6 billion euros, or $19.5 billion, in its latest fiscal year, which covered the 12 months to Jan. 31. according to his mother. Inditex IN
. Zara’s sales rose 29% to 10.9 billion euros in the six months to July 31, Inditex said this week.
Shein, which has no brick-and-mortar stores, sells exclusively online and currently ships its goods from China to more than 150 countries. The US is one of Shein’s biggest markets, accounting for about a quarter of the company’s gross merchandise value, Mr. Chiao said.
Workers at a garment factory that supplies Shein in Guangzhou, China, earlier this year.
Photo:
jade gao/Agence France-Presse/Getty Images
Currently, Shein customers have to wait 10 to 15 days for their orders to be delivered, a far cry from the average shipping time of retailers like Amazon.com Inc.
and rivals such as Zara and H&M that have relied on their brick-and-mortar stores to help quickly fulfill e-commerce orders.
Shein opened its first U.S. distribution center in Whitestown, Ind., in April of this year, and is expanding its footprint to 1.5 million square feet, up from 1 million square feet currently.
The company is planning to open a second, 1.8 million-square-foot distribution center in southern California by spring 2023. The two centers combined will employ about 3,000 people by 2025, Mr. Chiao said. Most of the new hires will be hired directly by Shein, while others will be contract workers. A third distribution center is being planned for the northeast, he added.
The retailer is also planning to hire at least several hundred employees at its US corporate headquarters in Los Angeles, its office in Washington, DC and potentially in other US cities. Shein now has more than 400 employees in the US, up from just 15 in 2019.
“We should probably have over a few thousand employees in the US by 2025,” Mr. Chiao said.
Shein’s long fulfillment times have frustrated some shoppers and could become a hindrance as the company tries to sell more products at higher prices with higher profit margins. Last year, Shein launched a premium label called MOTF, which has silk dresses priced at more than $100 and clothing made from cotton and wool.
“I don’t think you can sell products at mid-market prices with a 10-day lead time,” said Mr. Irwin of Credit Suisse.
Shein said it has shipped its goods overseas by air as well as ocean freight, and the company is trying to identify more products that can be shipped economically by sea, or even sourced from locations that are closer to customers.
Write in Jing Yang at Jing.Yang@wsj.com
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