st for its own brands, but for brands it has acquired and plugged into its high-speed supply chain and wide customer base. The Everlane deal is just a “dry run” of Shein’s acquisition strategy, which will pursue brands with different price ranges to attract a broad customer base, a source familiar with the situation told Reuters. Share price has fallen since listing Shein’s history so far suggests there could be obstacles. Its Hong Kong IPO this week followed years of attempts in New York and London where it was thwarted by regulatory hurdles. Shein shares closed on Friday at 38.14 Hong Kong dollars (US$4.86), more than 20 per cent lower than its offer price. Investors have yet to price in a successful transition to a brand and platform business, said Louise Deglise-Favre, lead apparel analyst at market intelligence firm GlobalData. She said building “a meaningful brand portfolio” takes years, whereas Shein’s revenue is being impacted now by US President Donald Trump’s decision to remove “de minimis” duty-free access for small parcels. Shein’s sales growth slowed to 1.1 per cent in the first quarter of 2026, from 8 per cent annual sales growth in 2025. Approached by Reuters, Shein said one of its priorities was to bring more brands onto its “Xcelerator” programme through which Shein sells access to its manufacturing network, warehousing and logistics, and its global sales platform. “We see significant potential to build on the track record we have established with successful brands such as Missguided,” a spokesperson for the company said. Shein acquired British fast-fashion retailer Missguided in 2023. Everlane deal faces reputational challenges One hurdle to Shein’s expansion strategy is its reputation. Reports of the Everlane deal in May triggered an outpouring of hostility on social media from the company’s customers whose loyalty is based on Everlane’s reputation for high-quality, sustainably made basics. Its slogans include “Radical Transparency” and “Clean Luxury”. It uses mainly organic materials, such as cotton, and shares details of the factory where each item is made. Shein’s clothes are mostly made of polyester and its website does not specify in which country each garment is made, let alone which factory. In a letter seen by Reuters, Everlane CEO Alfred Chang told employees Everlane would remain independent and true to its sustainability commitments. He added the acquisition would allow Everlane to boost its competitive advantage and reach more customers globally. In response to Reuters’ questions, Everlane said its leadership and brand standards remained unchanged. If successful, the Everlane deal could help Shein reach new shoppers, said Michael Gunther, senior vice president of research and market intelligence at Consumer Edge. “Everlane’s customer base obviously skews higher income than the Shein brand in the US,” he said. Supply-chain efficiency is a selling point Shein’s selling point for struggling brands is that its proprietary supply-chain software alerts factories when a product is in high demand, prompting them to increase production. It also tells them to discontinue a style if it is not being bought – a system Shein says helps it to maintain very low inventory levels. One of the brands in Shein’s “Xcelerator” programme increased sales by approximately 15 times in its second year, improved its operating margin by more than 30 percentage points and reduced its inventory turnover days by approximately two-thirds, according to Shein’s prospectus. “Shein at its core is one of the most efficient supply chains ever built,” Missguided founder Nitin Passi said in a LinkedIn post about the Everlane deal. Although Shein’s service revenue, or sales from its marketplace, is growing much faster than sales from its own product lines, it is still much smaller. “Acquisitions can give Shein another growth engine, but they cannot substitute for improving the economics of the core business,” said Jianggan Li, CEO of consultancy Momentum Works in Singapore. “One Everlane will not move the needle; what matters is whether Shein can prove this is a repeatable model.” Reporting by Helen Reid in London and Yantoultra Ngui in Hong Kong. Editing by Lisa Jucca and Barbara Lewis. All courtesy of Reuters.