The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Adam Whinston might have one of the toughest jobs in fashion.
The former Disney and JCPenney executive was hired last month as head of environmental, social and governance (ESG) at Shein, the Chinese fast fashion giant that in the space of two years has transformed from virtually unknown to one of the world’s fastest-growing apparel brands.
He’ll be tasked with countering criticism of the company’s business practices, which have ballooned along with Shein’s sales. To sustainability activists, the brand, which produces thousands of new styles daily, is the latest poster child for the fashion industry’s throwaway culture. Shein has been accused of partnering with manufacturers that violate Chinese labour laws and knocking off independent designers, among other alleged offences.
Until recently, Shein appeared to pay little attention to its critics. Consumers didn’t know much about the brand other than that it offers a dizzying array of fashion at rock bottom prices. Even basic facts about where the brand is headquartered and who owns it were shrouded in mystery. Chief executive Chris Xu, who started Shein in 2013, has never granted a press interview.
In appointing an ESG officer, Shein joins rivals in portraying itself as concerned with more than churning out clothes as quickly and cheaply as possible. Zara owner Inditex has pledged that all eight of its labels will only use recycled or sustainable materials by 2025, while Asos and Primark have made similar pledges that they say they’ll hit by 2030. Boohoo recently published its list of suppliers after reports revealed poor working conditions and low wages inside its Leicester factories, and appointed an ESG professional to its board in October. These decisions are made, in part, because consumers today — especially young shoppers concerned about climate change — want to buy from fashion brands that show they care about sustainability.
Still, Shein’s latest hire is unlikely to silence critics, and may even risk drawing more attention to Shein’s business practices.
“We see fast fashion brands go through this evolution of hyper-accelerated growth using exploitative labour practices and no environmental standards, and when they get big enough, they build a sustainability department,” said Elizabeth Cline, a sustainable fashion consultant and author. “It’s greenwashing and box-ticking.”
In an interview, Whinston acknowledged that his appointment is going to be met with scepticism, but said Shein is genuine in its desire to improve its record on sustainability. He said his first step will be to initiate an audit of Shein’s supply chain to uncover potential labour violations, a report that will be made public.
“It is absolutely a trend for companies to have an ESG leader, but it comes from a good place,” he said. “Sure, there will be critics who will say this is a media play or marketing play, but give us a chance to make those changes.”
Removing the Mystery
Shein has had a mysterious reputation from the beginning.
But the company wants to step out of the shadows, said George Chiao, president of US Shein, who was hired over the summer and also works out of its LA office (Xu and other senior executives are based in Guangzhou, China). Shein also hired its first head of corporate communications in October.
“We didn’t set out to become this big mysterious company everyone has made us out to be,” Chiao said. “It really stems from the fact that the company is based out of Asia and Asian culture is one of being humble. But recently, everybody’s come to understand that as you get bigger, you have a responsibility to let people know what you stand for.”
He said media reports estimating annual revenue of $15 billion are “close,” and that sales are doubling annually. He said the company has no current plans to go public.
Whinston, who will also work in the Los Angeles office, is joining Shein with about 20 years of experience in sustainability, most recently working as the head of responsible sourcing at Disney. He has also held similar roles at J.C. Penney and Hewlett Packard.
He’s focusing his initial efforts on Shein’s supply chain, which has helped it speed ahead of competitors. The company’s software plugs directly into factory floors, enabling it to churn out trends and iterate on popular styles daily. Shein has 600,000 products on its site at any time and adds about 6,000 new items every day, with the average item priced at $7.90.
A recent report from labour watchdog group Public Eye revealed that Shein uses some makeshift factories that don’t have emergency exits and feature barred windows. Workers also reported 75-hour weeks, with only one day off a month; workloads that violate Chinese labour laws. The report also found that Shein workers, who are mainly migrants, are paid per finished item; labour advocates say this “‘per-piece pay rate” forces workers to resort to untenable work hours in order to make meaningful wages.
Whinston said Shein already works with auditors, and also has a team dedicated to running a code of conduct compliance programme, but added that his role will include a more rigorous review of the 6,000 partner factories Shein uses.
“With a supply chain as large as ours, there are going to be violations,” he said. “I will be working…to ensure we are doing everything we can to identify and mitigate the problems in the supply chain.”
In addition to incorporating recycled materials into its fashion, Whinston said he will also be adopting a larger recycling programme across all Shein facilities for textile waste and packaging scraps.
The Limits of ESG
Some critics say Shein can’t be reformed. Its role in speeding up the cycle of production, consumption and waste outweighs any efforts to improve its record.
“You can’t produce [millions] of [items of] clothing a day and ever make that sustainable,” said Aja Barber, author of “Consumed: The Need for Collective Change; Colonialism, Climate Change and Consumerism.” “The entire model of moving large amounts of clothing daily — mostly polyester — at that speed is entirely unsustainable and leaves massive loopholes for exploitation.”
Others see Shein’s scale playing a positive role: at a very large company, even small changes can have a massive impact.
“With brands that are producing millions of pieces, changing one little component of their supply chain has huge implications elsewhere,” said Melanie DiSalvo, a supply chain consultant who has previously worked in manufacturing for companies like Target and Walmart. “Fast fashion is not going away. It’s here to stay; it’s part of global economies. How we are going to make real progress is figuring out how to make it more sustainable, not try to shame it out of existence.”
Cline said fast fashion brands need to go beyond audits or appointing ESG officers and change fundamental aspects of how they operate, such as setting a living wage for garment workers.
ESG executives rarely have the power to implement sweeping changes themselves, said Tariq Fancy, the former head ESG at the investment management company BlackRock. At many companies, the job is toothless, and used more as a marketing tactic, he said.
“No matter how good the ESG hire is, if what the world needs is going to cost [the company] money and reduce their profits, they 100 percent of the time are going to pick profits,” he said.
The Road Ahead for Shein
Whinston said Shein won’t consider slowing down.
“Shein makes fashion affordable by offering products at prices that most people can afford,” he said. “That is our core business model and I don’t think that’s going to change.”
Shein has big plans for 2022, including a push for SheGlam, the beauty brand it launched last year. Shein will also fire up marketing efforts for Motf, the company’s premium label, which targets customers who grew up shopping with the brand and now want something more high-end. Chiao said a programme is in the works where Shein shoppers can trade in used products.
“It will be a challenge to say ‘give Shein a try’ for some customers who have a preconceived notion of what Shein is, but I think we can solve that once we present the facts,” Chiao said.