Shein has disclosed that its U.S. business is under investigation by the Federal Trade Commission for unspecified reasons, a revelation that could lead to significant penalties for the fast-fashion retailer.
The investigation was detailed in documents filed with the Hong Kong Stock Exchange as part of Shein's planned initial public offering, which targets a valuation of up to $50 billion. Goldman Sachs, Morgan Stanley, and JPMorgan Chase are acting as joint sponsors for the listing, which received approval from Beijing's securities regulator in early July.
The disclosure comes as Shein faces financial headwinds in its largest market. The company posted a $99 million net loss in the first quarter of 2026, swinging from a $395 million profit a year earlier, driven in part by the removal of a U.S. tariff exemption on low-value goods. U.S. revenue fell 14.3% to $2.04 billion during the period.