France Mulls Penalties to Rein in Ultra-Fast Fashion Brands
French ruling-majority majority MPs will introduce mid-March a new bill that would tackle on the hyper consumption of ultra-fast fashion in the country by levying penalties on the clothes sold by fashion giant Shein in the country. These penalties are as high as 10 euros per item sold, or up to 50% of the selling price by 2030. These penalties are meant to offset the environmental impact of the Chinese giant’s commercial activity. How exactly?
Well, the bill argues that “This evolution of the apparel sector towards ephemeral fashion, combining increased volumes and low prices, is influencing consumer buying habits by creating buying impulses and a constant need for renewal, which is not without environmental, social and economic consequences.”
The bill singles out Shein due to its incomparable daily output of up to 7,200 new styles per day, and a product offering over 470,000 SKUs on their platform.
Just last year, Shein was valued at an estimated USD 60 billion, and while this number may seem high, it’s far from its peak valuation of USD 100 billion. Still, sales revenue at Shein is calculated at approximately more than USD 30 billion annually, which would put them on the same level as Inditex and H&M.
The introduction of this bill comes on the heels of Shein’s plans for an IPO in the NYSE. Whilst Shein is based in Singapore, the online fashion group has faced plenty of scrutiny by the SEC due to its ties to China and the origin of some key raw materials. Not surprisingly, Shein is considering a London floatation should it fail to get listed in the NYSE, where it would get a much higher valuation than in the UK.
The Hong Kong Stock Exchange seems to have been bypassed due to its recent poor performance.
Other measures that the French government has prioritized and that are currently in the works is to ban advertising by companies like Shein and Temu, as well as the introduction of financial incentives to artificially inflate the prices of ultra-fast fashion clothes so as to make sustainable fashion much more affordable.
