Shoppers walk past advertisements on the opening day of fast fashion e-commerce giant Shein, which hosted a brick-and-mortar pop-up at Forever 21 at the Ontario Mills Mall in Ontario on October 19, 2023.
Allen J. Cockroaches | Los Angeles Times | Getty Images
“Shein is the fastest-growing fashion retailer in the world, if not the largest fashion retailer in the world,” said Jamie Salter, founder and CEO of private brand management company Authentic Brands Group, during a fireside chat at the ICR conference in Orlando.
“There are rumors that they are making $30 billion, or $40 billion? Do they make 35 billion? “I won't tell you exactly what they make, but I can tell you they make a lot more than $30 billion,” Salter continued, in an apparent reference to Shein's annual revenue.
As a private company, Shein does not disclose its financial information. But that may have to happen soon after the retailer confidentially filed to go public in the U.S. following strong growth and months of efforts to address a series of concerns from lawmakers about its business practices.
However, Salter knows Shein's financials because of a partnership he signed with the company last summer. As part of the transaction, Shein acquired approximately a third of Sparc Group, a joint venture that includes Authentic and Simon Property Group. Sparc took a minority stake in Shein.
Sparc is the operator of Forever 21, which owns Authentic. As part of the partnership, Shein has begun selling a joint clothing line with Forever 21 and hosting pop-up events at the retailer's many malls.
Very little is known about Shein's financials, but parts of it have been leaked to the press in recent years as the retailer prepared for an initial public offering. The best available sales figure for Shein comes from a Wall Street Journal report in May that said the company had sales of $23 billion in 2022, citing people close to the company.
The outlet reported that Shein had set a goal of increasing sales by 40% by 2023, which would have brought its revenue to over $30 billion. It is unclear whether the company has achieved this goal.
Shein did not immediately respond to CNBC's request for comment.
If Shein's sales are “much more” than $30 billion a year, its revenue would still be far less than that of retail giants like Walmart and Amazon, which turn over hundreds of billions of dollars annually. However, that figure would at least put it on par with Zaras owner Inditex, with sales of €32 billion in 2022, and H&M, with sales of about $22 billion in 2022.
Total sales of over $30 billion would mean Shein dwarfs American retailers such as Abercrombie & Fitch and American Eagle, which most recently reported annual sales of $3.7 billion and $5 billion, respectively.
During the discussion, Salter discussed Authentic's history, its growth plans and how he decided to partner with Shein. Asked what some of his biggest mistakes were, he said failing to recognize the competitive threat posed by Shein and China-based online marketplace Temu.
“My partner, [Simon Property Group CEO David Simon] said, 'Why are you partnering with Shein?' Do you think this is the right decision?' and I said, “David, it's the right decision, we can't beat them.” Their supply chain is too good. You know what's going on. They figured it out. “We have to work with them,” Salter recalls. “So I was the brave one who said, 'Let's work with these guys.'”
Salter said the partnership is still in its early stages. “We’re just dating,” he said, as the two companies are still learning to trust each other.
“The pop-ups were huge home runs and, you know, Shein's Forever 21 was good, wasn't great, but it's still early. So the jury is still out,” Salter said. “You're dealing with some people who don't speak the language like we do, they have different rules than us and a different trust factor, it takes time, you know? You can't learn that.” “Trust someone in 15 minutes. You have to earn that trust. … It’s a work in progress.”
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