Shein’s High-Powered Lobbying Hires a Sign ‘Our Democracy Is Broken?’ - Sourcing Journal

3 months ago 37

Shein is stepping up its reach in Washington’s corridors of power.

The Chinese e-tail titan, which is growing its distribution network in the United States, recently hired Hobart Hallaway & Quayle Ventures and Akin Gump Strauss Hauer & Feld to lobby on its behalf, according to a pair of disclosures spotted by Politico last week.

Both firms, the documents said, will be working with the teen favorite on unspecified “legislative and regulatory issues impacting the apparel industry and e-retailers, including trade and tax-related matters,” as well as “general education” regarding its “presence, operating footprint and economic impact” in the country.

Shein, which commands a 28 percent share of the American fast-fashion market, told Sourcing Journal that its American expansion has added roughly 1,000 new jobs in the past year alone. In July, it joined the American Apparel & Footwear Association, a trade group that represents the interests of more than 1,000 brands and retailers, including Adidas, Gap Inc. and J.Crew.

“As a member of the business community in America, Shein will engage policymakers and participate in discussions that will help us continue to add value to the U.S. economy, support our American workers and bring industry-wide benefits to consumers,” a spokesperson for the Christian Siriano collaborator said.

A source familiar with the industry, who asked to remain anonymous, cautioned against reading too much into Shein’s new hires, noting that it’s “very common” for brands and retailers to hire third-party consultants and lobbyists, especially if they don’t have a presence in D.C. “Even with the associations lobbying on issues, most major companies also have their own outside consultants and lobbyists,” she said.

Retail isn’t afraid to splash out to influence legislation. In 2021, Walmart spent $7 million on lobbying, up from $6.4 million in 2020, according to OpenSecrets.org. Gap spent $1.3 million the same year, while Nike shelled out $1.2 million. Adidas, in contrast, paid out a modest $40,000.

Will Shein fight for or against impending transparency and wage measures such as the Fashioning Accountability and Building Real Institutional Change—a.k.a. FABRIC—Act? It’s still too early to say, said Seth Levey, a climate and sustainability expert and the outgoing head of public policy and sustainability at online consignment store ThredUp.

“If you’re the size of a Shein, you have to be very careful to protect your own positioning when it relates to certain issues,” he told Sourcing Journal. “It looks to me [like] they’re just beefing up their resources to be prepared for policy advocacy needs that probably span a bunch of different subject areas.”

These, Levey speculated, could include workforce, trade, data and privacy—basically anything that touches the multibillion-dollar juggernaut’s supply chain. Shein might want to keep open a de minimis loophole that admits its typically small-value deliveries into the United States free of duties, taxes or fees. It’s this strategy, Morgan Stanley has suggested, that has allowed the resale upstart to undercut the prices of rivals from H&M to Zara by as much as 50 percent.

“I’m not sure where Shein will come down on [issues],” Levey said. “We’ve seen some of the moves they made in their investments with philanthropic dollars. We’ll see whether their political dollars and their political activities match their public ESG fund. And I’m sure people will be watching that.”

Despite criticisms about Shein’s opacity, labor practices, copycat ways and, most of all, its unrelenting churn, which has led to accusations that its moves such as its $50 million “extended producer responsibility fund” are simply greenwashing, there are plenty of opportunities if it wants to help shape more progressive and climate-positive laws, Levey said. It could even borrow a page from ThredUp and advocate for textile reuse reform.

“Fashion sustainability and policy is a frontier space,” he added.

Others are more skeptical.

“Akin Gump [is] a huge and expensive lobbying firm,” Elizabeth Cline, director of advocacy and policy at fashion nonprofit Remake. “This is an example of Shein’s ability to buy the kind of influence and access to our government that it takes workers and everyday citizens years of organizing to achieve. If you want proof that our democracy is broken, here it is.”

But Cline, who also teaches fashion policy at Columbia University, said that she’s confident that the “political winds are blowing away” from companies like Shein. Lawmakers, she said, are “on the side of the public” when it comes to robust legislation on sustainability and human rights. The passing of SB 62, better known as the California Garment Worker Protection Act, was one major victory. New York’s Fashion Sustainability and Social Accountability Act and the aforementioned FABRIC Act, also seem to have the wind in their sails.

“The reality is that Shein is practically giving away clothes, and doing so by enabling human rights abuses and undercutting their competitors and the movement to make the fashion industry more responsible,” Cline added. “I have faith that the U.S. government will see through their efforts.”

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