Ultra-fast-fashion giant Shein revealed plans to invest €250 million in British and European designers and circularity initiatives over the next five years. This move seeks to tackle regulatory crackdowns on “fast fashion” and gain support for a potential London IPO.

Shein introduced a €200 million circularity fund targeting textile-to-textile recycling and innovation, encouraging co-investment from other entities. An additional €50 million will aid UK and EU fashion businesses in joining Shein’s marketplace and support its Shein X incubator program.

These efforts aim to alleviate issues and controversies hindering Shein’s public offering ambitions. Shein, having filed confidential IPO papers in London last month, has faced criticism for its supply-chain practices, product safety, and environmental impact.

Founded in 2012, Shein’s rapid rise involves a hyper-efficient manufacturing model producing new styles in small batches at low costs. The company’s gross merchandise value was reportedly around $45 billion in 2023, potentially marking its London IPO as one of the largest globally this year.

Amidst US-China tensions, Shein’s original New York listing plans were disrupted. Now, it contends with European regulations targeting fast fashion, aiming to bridge loopholes that allow low-value parcels to evade duties and fees faced by high-volume fashion retailers.

Shein’s executive chairman Donald Tang noted the company’s focus on “compliance and circularity,” emphasizing its “on demand” fashion model that scales production based on clear demand, thus reducing waste.

Despite last year’s €200 million fund being a small portion of Shein’s reported $2 billion profits, leveraging its market presence could substantially support innovators. Though full mechanics of the fund are still developing, Tang highlighted “enthusiastic feedback” from venture communities.

“Shein’s tradition is waste reduction,” said Tang, describing this initiative as the beginning of their efforts in circularity.