The US Federal Trade Commission (FTC) is investigating Shein's US operations, the fast-fashion retailer disclosed in documents published Sunday.
Shein did not disclose the reason for the investigation. The company warned that the outcome "may require us to make significant monetary payments that could have a material adverse effect."
Sources differ on whether the FTC confirmed the probe. One report says an FTC spokesperson confirmed a consumer protection investigation into Shein, while another states the spokesperson declined to comment. Shein did not immediately respond to a request for comment.
Shein's shift to a Hong Kong IPO followed a previous attempt to list in New York and London. A source with direct knowledge said that disclosing supply chain risks — including potential exposure to Uyghur forced labour — became a sticking point, as China's regulator could not accept such a filing.
Shein swung to a quarterly loss, partly due to slowing sales after the US removed the de minimis tariff exemption on small packages. The company had attracted a nearly $100 billion valuation in a 2022 fundraising round.