- How the industry uses things like #Girlboss, feminist tees, and cause marketing to sell you more stuff.
- When fast fashion becomes desperate and starts embracing greenwashing and new revenue streams like rental and resale.
- WTF is the de minimus rule and how is it benefitting fast fashion 3.0?
“After Months of Reported Dysfunction, Nasty Gal Lays Off 19 Employees,” Anna Merlan, Jezebel.
“‘Everything Really Hit Rock Bottom’: How Nasty Gal’s Culture Went Nasty,” Anna Merlan, Jezebel.
“How ModCloth Strayed From Its Feminist Beginnings and Ended Up a Walmart Property,” Anna Merlan, Jezebel.
“After reconsidering free returns, fashion brands get creative,” Maliha Shoaib, Vogue Business.
“Urban Outfitters Cannot Escape Le Tote’s Trade Secret Claims Over ‘Copycat’ Rental Biz,” The Fashion Law.
“Packages From China Are Surging Into US; Some Say $800 Duty-Free Limit Was Mistake,” Associated Press.
“Shein factory employees are working 18-hour days for pennies per garment and washing their hair on lunch breaks because they have so little time off, new report finds,” Sarah Jackson, Business Insider.
“Shein: Fast-fashion workers paid 3p per garment for 18-hour days, undercover filming in China reveals,” Rob Hastings, i news.
If you want to share your opinion/additional thoughts on the subjects we cover in each episode, feel free to email, whether it’s a typed out message or an audio recording: [email protected]
Or call the Clotheshorse hotline: 717.925.7417
In February of 2016, Jezebel writer Anna Merlan published a piece called “After Months of Reported Dysfunction, Nasty Gal Lays Off 19 Employees.” It was just one in a series of pieces she had written over the last few years, calling out the toxic environment at the company that was known for its #Girlboss founder, Sophia Amoroso. Like, Sophia was such a girlboss that she had literally written the book Girlboss.
In the past year and half-ish leading up to the February 2016 piece about the layoffs, information had been trickling out about pregnant women being fired for being pregnant (which is not only very un-feminist, but also ILLEGAL), among many other details about the decidedly un-feminist culture of the brand.
This February 2016 article contained some quotes from a previous piece that has disappeared from the internet–but fortunately still exist in this article.
Let’s read some these quotes, okay?
A current employee told Jezebel this winter that the office environment had grown very tense, with CEO Sheree Waterson delivering screaming tirades almost daily. In one bizarre incident, the employee said, Waterson spent almost a full day “freaking out” about Nasty Gal’s downtown office being dirty and trying to clean the refrigerator.
The employee called the environment “emotionally abusive,” adding, “Work is a constant fire drill based on Sheree’s whims that week. Her expectation is that we should work 7 days a week. There is never positive feedback. Only lectures and insults. What’s the opposite of being empowered? Marginalized? Everyone has developed stress related illnesses from shingles to IBS to stress eczema.”
“It’s so ironic to see how much of the world has been drinking the #girlboss kool-aid,” she writes in an email. “The actual environment at NG couldn’t be any more different from what Sophia portrays to the world.”
It feels weird to read these words aloud to you today because I find myself instantly transported to my desk in the Nasty Gal offices…my associate buyer Nitara sat on the other side of the divider from me, working on yet another reorder of the Champagne Taste blazer (most likely) or yet another “vegan leather” moto jacket. My planner–one in a series because the turnover was so high–was on the other end of the row, probably fretting about how we would ever get rid of three years worth of sweater inventory in three months. And my two best friends–Kim and Shari–were somewhere at yet another meeting in one of the rooms named after a movie.
And meanwhile, I was surreptitiously firing off an email to Anna Merlan of Jezebel, telling her what it was like to work at Nasty Gal. Yeah, that was me. Those were my words. And during the months leading up to those layoffs in February, I had worked with Anna on a couple of different pieces about Nasty Gal, connecting her with other frazzled, overworked, and ill coworkers. I was the one who tipped her off to the layoffs.
Kim and I ended up being laid off that day too, and wow were we relieved. Almost giddy about it. Dustin–who was just my boyfriend back then–picked us up from the office and took us to a bar in DTLA where we threw back whiskey cocktails and felt JUST SO FREE.
Would this be the end of my career in fast fashion? Oh hell no, the story just continues…
Welcome to episode 177 of Clotheshorse, part three of three in my exploration of the evolution of fast fashion over the last 15 years. I’m your host, Amanda.
Before we jump in, I just want to call out something: I know I haven’t shared any of the secondhand audio essays yet this month. And it’s because these episodes have ended up being so long! But they will start popping up over the next few weeks. I have some great ones and I’m excited to share them. The way I look at it, secondhand first is a big part of everything Clotheshorse, so they will never not be appropriate.
Okay, let’s get back into fast fashion, okay?
This summer I was driving with one of my coworkers–really someone I managed on my team at my last job–I was driving her back from a mall in San Antonio where we had spent the day remerchandising. It was our last project together because it was my second-to-last day at my job.
She asked me: was this your worst job? Because by now she knew (because she had witnessed the final episode that made me quit)…by now she knew that I had been dealing with a wild amount of stress, verbal abuse, and humiliation for the last year or so. It had to be the worst job, right?
But it wasn’t.
My best job was Modcloth by far. No argument there at all. I had left that job–perhaps foolishly, perhaps not–because there had been several rounds of layoffs in the last few years and I was scared of the future. Furthermore, a new CEO had come in. A guy named Matt Kaness who was from my previous employer and brought that kind of “rich white guys tell women what to do and yell at them” energy that I did not like. I just couldn’t see how this was not going to go awry.
In fact, another piece by Anna Merlan–seriously, does someone know her personally because she would be a dream guest on Clotheshorse–so another piece by Anna about Modcloth called out some other employees experiences with Kaness that did not surprise me:
“It was [Kaness’s] decision to remove plus from the website,” one employee who recently left the company says. “That’s when we all really started to think he was not a great fit. A lot of us who’d been there for a really long time and were women who weren’t a size two ourselves—who were part of the demographic we were speaking to—felt it was a bad move and was going to make shopping farr more difficult.”
He also said we were going to stop showing as many plus-size models because plus-size is ‘not aspirational.’ There was an audible gasp when he said that.”
Or how about this great Glassdoor review:
The current CEO has singlehandedly destroyed this brand, its culture and the morale of hundreds of employees. His conservative, misogynistic views are the opposite of what ModCloth used to stand for. The decision to eliminate ‘plus’ from the site, despite strong protests from employees who had been there for years and been part of the research on it, was the first big indicator of his ego problem.
I will say…after I left I heard a lot of really messed up stories about Kaness from my former coworkers. Lots of yelling, humiliation, and creepiness. That guy is now the CEO of Goodwillfinds.com. I’ll let you decide how you feel about that now.
Okay, so Modcloth, best job: really nice people, good benefits, nice working environment, manageable work load, and I really liked the founders Susan and Eric as people. Like truly kind and thoughtful people.
My worst job by far came after Nasty Gal, working for a small “feminist” brand. I’ll tell you more about that in a bit.
The second worst job was my last job. Not only did it destroy my self esteem, I now have scars on my forearms from the self-harm I was doing as a coping mechanism. Yeah, I get to be reminded every day of why it is important to catch those work red flags BEFORE you take the job. And always quit when it gets that bad, no matter what it means for you financially. Being broke and alive is infinitely better than being dead or super sick all the time.
So Nasty Gal actually kind of lands in the middle of “badness” for jobs, which says more about what it means to work in fashion than it does for Nasty Gal being a nice place to work. It was NOT nice place to work. But my coworkers (okay, not all coworkers) were some of the most talented people I have ever met. And I am friends with many of them today.
I was wooed from Modcloth to Nasty Gal by several factors:
- The previously mentioned sense of anxiety about layoffs and the new CEO
- The fact that my best friend Shari had just taken a job there.
- And the entire cult of girlboss. I had spent my career realizing that there would always be a low ceiling of what I could accomplish simply because of my gender. Despite an industry being fueled by women in every regard (making the clothes, designing and developing the clothes, buying the damn clothes) the industry was always run by white dudes. Women rarely got to reach the top. And the idea that maybe Nasty Gal was different was very appealing to me.
And in fact, it was my realization that #girlboss was just another scam that made that job super devastating and disappointing.
The company was indeed run by a women: Sheree Waterson, previously fired from Lululemon for the see-through pants debacle. She 100% had no idea what she was doing at Nasty Gal and that is the biggest reason the company went under. I could talk about that all day. Maybe that’s a bonus episode!
Every other executive was your typical white dude, and these particular white dudes were hella toxic, super cruel and harassing.
So I took this job with high expectations. It didn’t help that the recruiter promised me that Nasty Gal was an amazing fun place to work. And the business was so on fire that everyone always got huge bonuses.
The interview process had been harrowing:
- First, i had been brought in for an interview about six months prior, then completely ghosted.
- Then after Shari was hired she was like “um, why haven’t you hired my friend, Amanda?” They brought me back in.
- Then made me do TWO different projects because Sheree Waterson wasn’t sure if I had “good” taste because of the previous places I worked. Um interesting because both of those businesses were much bigger and more successful. But this kinda planted a seed in my brain that I was “lucky to be here” at Nasty Gal, so I didn’t push back on the salary they offered me and I felt like a major imposter for the next six months or so.
On my first day, I sit down at my desk and examine the mountain of sales reports…and I am immediately like HOLY SHIT this business is FUCKED. Categories who had years and years worth of inventory on hand. That’s a bad thing. Like a healthy business has three months of inventory on hand, meaning enough to fuel three months of sales. Maybe six months if it’s a slow category. But 3+ years? That’s a disaster. Soon it became apparent that Shari and I (and later Kim) had been hired to try to fix this situation. But I didn’t even know where to begin.
And we couldn’t fix it because the executives picked a new strategy every week, never allowed any of these strategies to play out, and expected us to work all day/every day. Sheree Waterson herself said “I like to send out emails on the weekend to see who responds. Because anyone who doesn’t, doesn’t care about their jobs.”
First we were chasing more expensive product, then nevermind…everyone head off to the Mart for cheaper product. Now let’s try activewear. Or Sophia is getting married, so let’s make a wedding collection. Let’s do more t-shirts. Now more dresses. Nothing ever stayed the same for very long
I could tell you wild stories all day. Shari and I used to joke about writing a sitcom about working there. It was so ridiculous. By late fall/early winter, when I reached out to Anna Merlan, saying “hey, I’m a senior buyer at Nasty Gal and I want to talk to you about how it really is here,” I was fully pissed off and epically disappointed. And lowkey trapped. Because working fashion in LA, you don’t have a lot of great options: Forever 21 (notoriously horrible company to work for that expected a minimum of 12 hours of work each day), BCBG (equally horrible), or Guess (also terrible with sexual harassment added into the mix). There was Revolve but I had heard weird stories. And Reformation was coming up on the scene, but so far they just seemed notorious for having candidates do merchandising/product projects and then ghosting them.
And you know what? It did suck that everyone on the outside thought Nasty Gal was this super cool, super feminist place to work. Because it just wasn’t. It was all a lie. Lots of diet culture, fat shaming, creepy white dudes in leadership, and super high turnover/low pay.
What a disappointment.
So, Kim and I were laid off. I kinda knew it was coming because we had been talking in November in our leadership meetings about how the company was running out of money. Kim and I were let go because we were some of the most expensive employees. They also cut a lot of creative roles and the production team. A few months later the designers were let go. And then the bankruptcy happened.
If you listened to the last episode, you know that Nasty Gal was eventually bought by Boohoo. And the transition was very confusing for customers. One night at midnight the website went dark and then the next morning it looked slightly different (barely) and the product on the site looked similar but was half the price or less. And suddenly everything shipped from the UK. The quality was even lower.
Meanwhile, I spent a few months looking for a job. The options felt dismal. I was definitely very anxious and worrying about money. I had received a couple of months of severance and unemployment, but that only goes so far in Los Angeles. I kept myself busy, going to museums, volunteering more at the kitten shelter, going to the beach (my favorite place), hiking with Shari on the weekends, learning how to cook Korean food.
But other good things happened, too. Dustin took me out for a drive to Malibu…and then got down on one knee and proposed marriage. He knew I wasn’t a diamond kind of person, so he had a ring custom made by a jewelry designer that had a huge raw emerald on it instead of a diamond. And this–marriage–was something I never saw coming for me. After losing Dylan’s father and navigating a few very difficult relationships over the years, I just didn’t care about dating and marriage. I just wanted to live a good life. Be happy. Do things that I liked. Spend time with people I loved. But even when I said yes to Dustin that day on the beach, I didn’t know how important and magical our partnership would be.
This kinda put more pressure on me to find a job. Because Dustin wasn’t doing very well financially. There were a couple of times I had to help him with rent because at that point, his income relied on doing sound at live shows and touring with bands, either as a sound guy or playing on stage with them. And it was unpredictable. He didn’t want to go on tour for long periods of time anymore because he wanted to build a life with me.
Ultimately I ended up accepting a job–the worst job–working for a small brand in the Pacific Northwest. And what happened there was indicative of the next phase of fast fashion, and how it was kinda falling apart.
By 2015-ish, fast fashion is kinda running out of ways to compete. Brands had hit the bottom in terms of pricing. And it was hard to imagine how anything could be faster.
How does a brand stand out when everyone is kinda doing the same thing?
Some analysts said it was important to really find your niche, narrow your focus onto one customer. And that was what my next employer after Nasty Gal did, focusing on sort of “tomboy/unisex” aesthetic. But if you narrow your focus too much, you can’t grow, right? And that’s what investors want: unlimited growth and profitability. In fact, investors in Nasty Gal and Modcloth had been pushing for that and guess what? Those brands failed. Modcloth was going to go under if it wasn’t acquired by Walmart. And Nasty Gal…well, it did go under.
I began to see more and more industry articles (and then panel conversations at various trade shows) about something interesting: millennials only wanted to support brands that had a mission or a cause associated with them. Which was kinda ironic because you know, Forever 21 and Zara and H&M and Wet Seal and so many other fast fashion brands were making a killing off of millennials, but okay, this sounds like a good idea?
And so smart brands started to lean into it:
- #Girlboss was a cause within itself, right? And periodically we would sell something with a giveback component, creating grants for small women-owned businesses. Wait, I’m sorry…Girlboss-owned businesses.
- Brands like Everlane and Reformation were pushing this “sustainability” angle. Reformation was trying to prove that “fast fashion, sustainability and local manufacturing can co-exist.” Spoiler: it turns out that fast fashion and sustainability can never co-exist. But people fell for it. I fell for it. I didn’t know then what I know now.
- Everyone was looking at Toms and Warby Parker and trying to think of how they could adopt a “buy one, donate one” kind of model. Skechers went as far as completely copying the Toms concept by launching Bobs. Dustin and I joke about Bobs way too often.
- From feminism to environmentalism, every brand was looking for an angle (except for the ones like Urban Outfitters and Anthropologie who waited a long time to try that out). But this is definitely when we start to see Earth Day collections and instagram posts from big brands, right?
So Dustin and I moved to Portland for this new job. Right out of the gate, I was stressed, but I remained optimistic. And to be fair, over the years I grew that business exponentially by creating a private label line of clothing that made the business bigger and more profitable.
For years, the brand had been primarily selling men’s clothing in smaller sizes to women.
Right around the time I joined the team, the business had struck gold with a collection of “feminist” tees. It was sort of an accident, but it was perfect timing. Because this is when Donald Trump was running for president and all of the Access Hollywood stuff was released. Feminism was becoming a bigger conversation as the election approached. And this was a great time to sell feminist tees. When Trump won and the Women’s March took place…OMG it was like freaking Christmas for anyone who had feminist gear to sell. I was working round the clock to keep the business in stock, even ordering feminist tees while wearing my wedding dress…on my wedding day. Because this job had no boundaries.
Now, trading in feminism or any other issue of social justice is murky, at best. It feels weird to make money off of social justice and it felt even weirder to see everyone doing this: Forever 21, Zara, H+M, Free People…everyone was churning out feminist tees and accessories. Most customers didn’t care and just kept buying it all. Hats, tees, pins, patches, magnets, wall art, desk plaques, all of it and anything they could get their hands on. But more and more voices were emerging to say “It’s not okay to profit from human rights.”
And so this is when we see cause marketing become a BIG thing: meaning “a portion of sales from this collection or item will be donated to such and such charity.” Often Planned Parenthood at first, but other organizations as time progressed. Every brand jumps on the bandwagon. And here’s the thing: “a portion of the proceeds” or “1% of every sale” or whatever, is still HIGHLY profitable. Because just like covering all the air freight or accounting for selling stuff on sale or all of the other tricks in the world of fast fashion, if you plan for that giveback up front, you can cut the cost of the garment to accommodate it. So, cutting corners, squeezing factories, paying workers less…at the feminist brand it never stopped frustrating me that we were giving 1% of our sales to Planned Parenthood, while our employer didn’t provide health insurance for any of us.
Furthermore, none of these donations were really that big. 1% of proceeds often means 1% of profits, so we’re talking a few cents per unit sold. And the donations would be sent to the recipient months after the campaign was over, sometimes as far out as a year later.
By 2018-ish, cause marketing was hitting a wall because it was so oversaturated, just like every other fast fashion trick of the last decade. If everyone is selling something as a charitable giveback, it doesn’t feel special any more. And by then, even Toms had been acquired by a venture capital firm, so it no longer felt as special, either.
At this point, we see fast fashion getting a little desperado. There’s a lot more talk of sustainability. H+M had launched its first “conscious” collection in 2010, and it was picking up momentum. Zara was following suit. More and more brands were jumping in with special sustainable collections. Greenwashing picks up major momentum. It’s not sustainable if the workers making the stuff aren’t being paid a living wage, but no one was asking about that. So this greenwashing was pretty successful.
And there are lots of other ideas swirling out there, specifically around rental and resale. Because fast fashion brands are like “okay, how can we continue to grow sales when it seems like maybe people are finally hitting their threshold of how many new clothes they can buy every year?”
So I left the feminist brand in mid 2018. I was burned out . I was underpaid. I was disenchanted by yet another fake feminist company. And honestly, I’m not even sure if I’m ready to talk about how much that job messed me up because it was just that bad. I internalized it for a long time, until I finally broke down in the car with Dustin one morning. I felt trapped (again) because our quality of life (and Dylan’s future) depended on my job. And if we were middle class, it was just barely. Everything felt so tenuous. To make matters worse, Dylan had been dealing with some major mental health issues and hospitalizations that had nearly bankrupted us because the insurance we got through the ACA barely covered anything (while costing way more than any employer-backed plan would have).
That’s how I ended working at my last job before the pandemic, working for a new rental platform. At this point, everyone was talking about rental and secondhand as the next big thing. And both of these ideas combined “get rich quick” fantasies with greenwashing. Rent the Runway was filling investors’ imaginations with dollar signs, despite never being profitable. ThredUP was hyping up secondhand as the future, despite…yep, never being profitable. And then there was drama with Urban Outfitters and Le Tote…
Ultimately by early 2020, brands were just like “what next?” Because 12 years into the fast fashion era, things were happening that made it hard to make fast fashion a profitable business, or at least, as profitable as it had been in the early days:
- Creating and housing so much inventory was a liability. Remember, every year the fashion industry makes 45 billion garments that will never sell or be worn. This overproduction stems from multiple issues:
- buying into the wrong stuff
- delusional sales plans that are not achievable. the higher your sales plan, the more inventory you need to hit that sales plan. miss the sales plan? you’re left with a lot of unsold stuff
- massive quality or fit issues that were never corrected or caught because the industry was working too fast
- pulling a product because it was a stolen design or art
- or buying more than is needed to get a lower price. in fashion, the larger the order, the lower the cost
- And guess what? Getting rid of all of that inventory costs money, too!
- Returns were KILLING the industry. We’re talking 30% or more (depending on the brand) of clothing bought each year being returned. And processing those returns is brutally expensive. In fact, more and more retailers were saying “go ahead and keep it, we’ll give you a refund” because that was cheaper! “Returns of online fashion orders in the US incur an estimated $25.1 billion in processing costs for companies annually, according to Coresight Research.” But retailers couldn’t stop offering free returns, because that’s what everyone was doing. Taking that away would mean a drop in sales. And they couldn’t let that happen.
All of this would come into sharper focus (and more panic) by late March of 2020, when life came to a weird quasi standstill. Could fashion remain fast when everything else was at a temporary stop?
If you read as many thinkpieces about the pandemic’s impact on fashion at the height of the pandemic as I did, well, I’m sorry that you did. Because most of them ended up being complete nonsense in hindsight. We were told that
- Fashion was over and we were only wearing sweatpants from now on (and forever).
- No one would ever prioritize style over function ever again.
- Fashion would finally slow down and the spell of fast fashion was broken.
- Customers would buy less because fashion was over.
I never bought that nonsense for a minute. And not just because I don’t like sweatpants. I just knew that we would get tired of our pandemic clothes as soon as we felt safe leaving the house again. And while many of us still don’t feel “safe,” the world has forced most of us to pretend that everything is okay. The early days of the pandemic feel both near/current AND far away.
In March/April of the pandemic I was wearing gloves and a mask to grocery shop. I took off my clothes inside the front door and immediately threw them in a plastic bag to wash ASAP. I didn’t want my family to die a horrible death alone in the hospital.
By April, I had been furloughed from my job and I would never return. The last thing I had done before being furloughed: cancel every single order we had placed, even if the product was already made and on the way to the warehouse. It was terrible. Sales reps cried (and lost their jobs). Vendors begged me to reconsider (because this would mean bankruptcy for them). Brands went out of business. And the whole thing struck me as fundamentally immoral because my employer was just one small brand under a larger fast fashion parent company that owned several large brands. All of those brands were canceling their orders, too. The company always bragged about having $100 million in the bank, but here we were canceling everything and ensuring that the people making those clothes would starve and lose their homes. It was disgusting, but I also knew that I had no say in the matter.
Every other retailer out there did the same thing, not wanting to be stuck with even more inventory that they could not sell. And everyone was convinced that fashion was over. That people would never buy new outfits again.
And then…Shein does $10 billion in sales in 2020. It becomes the largest online retailer of clothing in the WORLD by October, while every other brand out there is on the verge of failure.
How was Shein just killing it when we were supposed to be wearing sweatpants for the rest of our lives?
Well for one, every other retailer hit the panic button and stopped offering new stuff. Eventually they shifted into offering loungewear, which I’m sure drove some sales, but it was kinda lackluster. And not offering new stuff was a mistake, because when your model involves getting people to shop from you as often as possible, well, they won’t do that when you’re not giving them a reason to come back.
Shein was like “we’re going to launch 6,000 new styles every day.”
“We’re going to use technology to ensure that we are offering product that aligns with every new microtrend and aesthetic that people are talking about on social media…especially this new app TikTok.”
“And we’ll leverage social media to get people to come to us to buy new clothes to cheer themselves up.”
Because that’s the thing: while many of us were sitting at home worrying about money because we had lost our jobs, lots of other people were still working and had nowhere to spend their money now that they couldn’t travel or eat out. So…time to do some online shopping! And once again, every other retailer had nothing new to offer. But Shein had thousands of new things every day. And it was all so cheap and plentiful! Can’t leave the house? That’s okay! Sit on the couch and assemble a Shein haul on your phone! Furthermore, while people might be worrying about money or see a drop in their financial security–they don’t stop buying stuff…they keep on shopping, just for less expensive stuff. And Shein had the perfect prices.
Shein is officially fast fashion 3.0 because it makes the model work even faster. How?
Well let’s recap what we have covered:
- Fast fashion 1.0 was way faster than anything that had come before it. A product could start as a concept and be in stores/on the website within six weeks. This allowed retailers to practically re-invent their stores every month or so. All of that product shipped overseas from the factories (often via airplane), where it was trucked from the airport to the brand warehouse. From there, it was shipped off to stores or customers.
- Fast fashion 2.0 speeds that up to about 2 weeks by manufacturing locally, often under shady, exploitative conditions. But the product still shipped to the warehouse in one big shipment, where it was stored until it shipped off to the customer.
So the path was always (no matter how fast it was) factory—>airplane—>truck—>warehouse—>store or customer
Here’s the thing about that path: it’s expensive! You have to build warehouses. You need staffing for the warehouse. You pay customs and duties on all of those big cargo shipments. You pay to have the shipments trucked to your warehouse. You’ve paid to ship into the country and now you pay to ship it to the stores or customers. And all the way, you’re paying people to handle this product.
Fast fashion 3.0 cuts down that process to factory—>airplane—>customer.
There is no warehouse. There is no big cargo cost. There are no customs and duties. There are very few people to pay along the way.
Shein and all of its copycats/peers ship directly from the factory to the customer. This model is already profitable by cutting out those middle steps, but there is another part of it that makes it so much more profitable: not paying customs and duties.
That’s thanks to the “de minimis” rule, which allows any package shipping into the United States with a value under $800 to be exempt from duties and customs inspection. Until 2016, that threshold was $200. Raising it 400% opened the door for Shein and its peers like Temu and Cider to very profitably ship into the United States. In 2016, the de minimis rule applied to about 220 million packages making their way into the US, directly to consumers. By 2021, it was 771 million, with 60% of those packages coming from China.
Shopping factory direct from China isn’t new per se. Members of the Lolita fashion community have been doing it for years, finding small designers via Taobao. But ordering via Taobao wasn’t easy: you often needed to jump through some hoops to place an order and it took a long time for the product to reach you. AliExpress was another option, but it was really intimidating to most customers and once again, the product took a long time to get to you. Wish started off with a bang, making factory direct shopping from China easier, but customers were often wildly disappointed by the quality and reality of what they received. And once again, the shipping took a long time.
Others were a little bit more successful by focusing on specific style subcultures, like Light in the Box (basically an easier version of shopping Taobao with higher prices). And other people were making a fortune essentially building websites for customers to shop that connected to dropshippers on AliExpress. So you might think you were buying from a person here in the US, but really, you were buying from a factory that sold on AliExpress.
When Shein first started, it was kind of a joke, a creator of memes. You know “what I thought I ordered, what I really got from Shein.” But Shein got it together by more tightly managing its factory base, using technology to analyze demand and iterate upon best sellers, and making ordering and shipping super easy.
By mid 2021, every investor out there wanted to know “what is the next Shein? And how can I get on this train?” Matthew Brennan, a China-based tech expert who has spent a lot of time researching and writing about Shein, told Business of Fashion in 2021, “Everyone in China has been looking at Shein and trying to dig out things to copy. All of the pieces of the puzzle to the business have already been out there, but no one has executed them as well as Shein.”
This is when we see more and more brands popping up–practically an infinite list at this point–offering factory direct product. And these factories are kinda selling everywhere: on Amazon, Temu, Etsy, Cider, AliExpress, Shein, and so much more. It’s sort of a “renaissance” of connecting customers with Chinese factories.
Once again, all made possible by technology and the de minimis rule.
And this model, which doesn’t have to pay for warehouses, customs, or really much of anything ensures that Shein and its competitors can offer prices that no one else can compete with. This still might seem like a good story, like Shein is making fashion more affordable for people. What a hero! But it’s way more complicated than that, right? I mean, the quality isn’t that great.
For one, Shein (and all of the fast fashion brands) have practically become shorthand for “stealing from artists, designers, and small brands.” And they were getting away with it because it’s hard to fight a bigger retailer when you’re a small business…furthermore, customers were buying these copies without hesitation.
In mid-July of this year, , three independent designers/artists (Krista Perry, Larissa Martinez, and Jay Baron) filed a case in California federal court against Shein and its “related entities” (more on that later).
I am so proud of them for making this move because it has been a long time coming! Just about every artist/designer/brand I admire has been knocked off by Shein over the last few years.
The case involves copyright and trademark infringement by Shein, specifically citing“their practice of “produc[ing], distribut[ing], and selling exact copies of their creative works,” which they allege is “part and parcel of Shein’s ‘design’ process and organizational DNA.”
A case of this nature has been a long time coming because Shein is infamous for copying artists and designers and never facing repercussions for it. And social media is filled with stories of artists and designers trying to hold Shein accountable without success.
The case claims that Shein uses a powerful algorithm to capture fashion trends early in the cycle, then uses its production and fulfillment infrastructure to make “billions of dollars” churning out new product and stealing designs/art every day.
Shein generally gets away with this unethical behavior for several reasons:
- It usually orders only about 200 units of a new item. In contrast, a standard fast fashion retailer would order 1,000 to 10,000+ units in an initial order. In fact, Shein’s ability to produce so few units speaks to its unique factory situation, because it is extremely difficult to make less than 300 units of anything..and even 300 units is iffy, even when you are a large retailer. Usually prices go up as the size of an order goes down, making small batches too expensive for your standard fast fashion customer’s budget. So this ability to produce in very small batches and keep pricing low gives Shein a major advantage.
- Why does Shein order so little? It allows them to test the legal waters. If an artist/designer/brand discovers the stolen design, Shein can settle cheaply and fast, with little financial loss.
- The small quantity allows Shein to claim it was a “blip” in the system. Often Shein will say that a third party partner was responsible for the “mistake,” which allows them to avoid accountability from both the designer AND its customer base.
- One more thing about the “small quantities” Shein and Cider cite this as a reason that they are more “sustainable” than other brands. But let’s unpack this a little bit: Shein launches 6000 styles every day. That’s…2,900,000 styles per year.
- Even Shein only made 100 units of each style, that’s 219 million garments.
- If they make 500 units, suddenly we are more than a billion.
- And yeah, that has a lot of impact because it uses a lot of resources and we know that many of these garments will be barely worn. I saw so many Shein items at the thrift store this weekend that still had the tags on them.
- So these claims of “sustainability” are bullshit. But I see how it works better for them from an inventory liability perspective AND how it helps them hide from legal issues.
As I mentioned earlier, designers and artists are generally unable to do very much about Shein’s intellectual property theft.
If the designer can afford a lawyer (and that’s a big IF), they might be able to negotiate a settlement. More often than not, nothing really happens, other than Shein pulling the item off the website.
Furthermore, if there is no pushback from the creator of the design, and customers like the product, Shein will order many more units. When customers buy copies/knockoffs, they are actually signaling Shein to continue copying.
Often when an idea/design/art enters the “knockoff” cycle via SHEIN, it’s just the first stop on a long, uncontrollable chain of copies that move through progressively less reputable brands, ultimately living on Amazon or AliExpress for years. This robs the original creator of ownership and often decreases the value of their original work. This can end their business completely or force them to find a different direction. To be clear: stealing designs and art is NOT a victimless crime. It actually stifles creativity and innovation while stomping out small business.
This lawsuit is specifically using RICO laws as its basis. The RICO act (“Racketeer Influenced and Corrupt Organizations”) was first used in the 1970s to take on the Hell’s Angels. It has been used since then to dismantle organized crime. It was also used in the Enron and Bernie Madoff cases.
The RICO act allows authorities to take legal action against collectives and conglomerates, rather than an individual or single company.
While using laws that were designed to take down organized crime might seem a little dramatic, this is essential in holding Shein accountable, because while it seems like a big monolithic company to customers, it’s actually a collective of shell companies, holding groups, and random-seeming conglomerates based all around the world, in what the case calls a “byzantine shell game of a corporate structure.”
This confusing structure allows Shein to duck a lot of responsibilities:
- Legal repercussions of intellectual property theft and consumer injury. Tracking down a defendant for any lawsuit is nearly impossible. Often cases cannot move forward. Find lead in your Shein clothing? Oh well there’s no one to hold responsible. Same thing if you discover they have stolen your art or design.
- Taxes and duties. No clear central hub in one specific country allows Shein to avoid a lot of taxes and customs fees. And yes, that saves them a lot of money.
- It also allows Shein to skirt issues of labor safety and wage theft. If it’s unclear who is responsible for a factory or a product, government agencies cannot hold anyone accountable or force change.
Next, Shein and these fast fashion brands don’t really know much about their supply chain. Do you remember that disastrous Shein influencer trip this summer? Shein brought some influencers out to China, took them to factories where their products were supposedly made, and everyone had a really great experience. The thing is: this was a prearranged trip. So yeah, those factories (if they were even the real factories) had time to make everything clean and safe looking.
Meanwhile, a 2022 undercover investigation by from Channel 4 and The i newspaper in the UK had found some pretty horrible stuff in factories making clothing for Shein:
- Workers worked 18 hours a day, getting only one day off per month.
- Employees were so overworked that they washed their hair at work to save time (there was not enough free time to do it elsewhere).
- Workers would be fined ⅔ of their total wages for the month for one small mistake.
- The workers sewing these garments made 4 cents per item, with a goal of about 500 garments per day. In other words, they were paid $20 a day to work 18 hour shifts.
In fact…Shein has such little visibility into its supply chain, that despite claiming that there is no forced labor within its supply chain, a report issued in June by the U.S. House Select Committee on the Chinese Communist Party indicates that there is probably a lot of forced labor happening in the factories making its products. I’m primarily referring to the forced labor of the Uyghur Muslims, but political dissidents and other religious groups (like Tibetan buddhists) have also been forced into work camps.
The de minimis rule actually makes it easier for fast fashion 3.0 to ship product made with forced labor into the United States. The sheer volume of packages ensures that customs agents will never be able to inspect them all, or even a few of them. And in general, de minimis packages kinda fly through the system, without any stop to check them. The UFLPA is the Uyghur Forced Labor Prevention Act, passed in 2021 to prevent products manufactured using the forced labor of Uyghur Muslims in to the United States. And there is concern that Shein, Temu, and their peers are using this de minimis loophole to skirt compliance with the UFLPA.
There is conversation about rolling back the de minimis threshold…and I recommend that you call your Senator or Congressional representative and tell them that you want this to happen! This could force a significant shift in what Shein and its peers are shipping, especially because they would be subject to duties and customs, including (hopefully) inspection for forced labor.
Furthermore, let’s think about the journey of a garment made by a fast fashion 1.0 brand:
- It passes through customs, where any major safety issues will be spotted.
- Next it arrives at the warehouse, where the staff unpacks it and recognizes any large quality issues.
- Next it arrives in the stores where more people unpack it and can spot any other egregious concerns.
- By the time it gets into a customer’s hands, most big issues have been caught.
In fast fashion 3.0, no one sees it between the factory and the customer. No one catches the quality and safety issues.
So yeah, fast fashion 3.0 isn’t great. But it’s effects are even bigger than the “mere” repercussions of human exploitation and egregious waste:
- For one, retailers here in the US can’t compete with those prices. After all, they have the expenses of customs, duties, taxes, warehouses, and staff. So the Shein era is definitely going to drive a bunch of brands out of business. Am I crying over the potential loss of Forever 21 (who is btw now partnering with Shein)? No, but people will lose their jobs. Lots of people will lose their jobs.
- I want to assure you that brands won’t go down without a fight. And where they will start is by lowering their prices. And they will get there by cutting their costs: laying people off, maybe getting rid of more expensive employees so they can hire new ones for less money, pushing factories for even lower pricing (putting garment workers in an even more terrible position), and generally creating even lower quality goods.
- In fact, the ripple effects of fast fashion 3.0 are bad for everyone, everywhere:
- More low quality clothes entering the landfill even faster.
- All of us spending more money, more often to replace our clothing because they are low quality. Think about how much we had to lower our expectations for clothing in the last decade? Imagine it even worse. Because retailers can’t offer Shein pricing with the current quality while still having warehouses and stores
- More and more synthetic fabrics (because they are cheaper) shedding microplastics.
- Wages for warehouse workers, retail staff, and even corporate staff being suppressed even more (so it becomes even harder to make a living with these jobs).
- And here’s the thing: when wages in one industry are suppressed, it carries over into every other industry. If you don’t think what Amazon workers are paid affects what you are paid, you’re wrong! These big companies set the standard for pay and benefits. Basically fast fashion 3.0 will affect every worker (all of us).
I was going to end this by trying to imagine what fast fashion 4.0 is…and I just can’t do it! It’s too scary!
So let’s wrap this up instead by talking about what WE can do to slow down fast fashion 3.0 and maybe, just maybe, prevent 4.0 from ever emerging:
- Change your habits! We shop for a lot of different reasons (and most of them having nothing to do with actual “need). It’s important to get to know yourself and why/how you shop. Retail therapy is not therapy.
- Buy less and make it last longer! This includes learning to mend (visible mending is an art form) or paying others to mend and repair your wardrobe. Do laundry carefully. And make thoughtful decisions about what you decide to buy.
- Be a proud outfit repeater! Dismantle the expectation that you have to wear a new outfit for every event and instagram photo. And you definitely don’t need a new wardrobe for your vacation.
- Adopt a Secondhand First approach (meaning opting for secondhand as often as possible). It won’t be every time, but most of the time is still a big help!
- Share your knowledge with others! Because people don’t know this stuff!
- Lead by example. Show others what the slow fashion way of life is on social media and IRL
I’ve said it many, many times before and I’ll say it again: one person can’t make a difference alone, but when all of us are talking about fast fashion, changing our habits, and pushing for laws around this stuff, we will make a serious change!