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Shein Commits €250 Million to Circularity Efforts in UK, Europe Amid London IPO Push

Image from the Shein X Rescued line, developed in partnership with Queen of Raw.
Item from the Shein X Rescued line, developed in partnership with Queen of Raw. (Image courtesy Shein)

Shein may be hoping to grease the wheels of its latest IPO effort in London with newly announced plans to invest €250 million (approximately $271 million) in circularity and ESG efforts throughout the UK and EU over the next five years.

The investment will include the creation of a Circularity Fund as well as €50 million earmarked for “operational and commercial investments aimed at further enhancing Shein’s circularity efforts and supporting the local entrepreneurial ecosystem in the UK and Europe,” according to a company statement.

“As a global leader in our sector, Shein has both a responsibility and an opportunity to accelerate innovations that can address the environmental footprint of the fashion industry,” said Donald Tang, Shein Executive Chairman in a statement. “The Circularity Fund will build on our support for entrepreneurs and businesses at the forefront of innovation in circular initiatives, with a focus on supporting entrepreneurship and innovation in the UK and the EU, where some of the most exciting work in this space is taking place. Given Shein’s scale and reach, Shein can become a catalyst for the widespread adoption of these solutions across the industry.”

Shein Circularity Fund to Focus on Recycled Materials

Shein will provide launch capitalization of €200 million for the creation of the Circularity Fund and is inviting other businesses, financial institutions and sovereign wealth funds to co-invest in the fund.

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The aim of the fund will be to support startups and businesses throughout Europe and the UK that are developing next-generation technologies and solutions by:

  • Investing in early-stage startups working on textile-to-textile recycled materials innovation and related areas; and
  • Entering into offtake agreements or other commercial partnerships with more mature startups with existing production capacity in textile-to-textile recycled materials or new and emerging preferred fibers.

The remaining €50 million of the initial €250 million commitment is earmarked for initiatives to support brands, designers and artisans across the UK and EU in growing online via Shein’s marketplace services. Some of that money also may be used to invest in R&D or to pilot Shein production facilities in Europe or the UK. This will include:

  • Funding to bring more UK and European artists and designers into the Shein X designer incubator program, Shein’s initiative to enable up-and-coming designers to commercialize their designs by partnering with Shein on manufacturing, marketing and logistics; and
  • Creating a dedicated initiative to help UK and European businesses onboard onto Shein’s marketplace platform.

Latest Circularity Push Joins Previous Shein Recycling and Reuse Initiatives

This isn’t Shein’s first foray into the world of circularity. Efforts already underway as part of the EvoluShein Roadmap include:

  • Partnering with Queen of Raw to source surplus or “deadstock” fabric from other brands that are then used to make new Shein garments. In 2023, Shein also integrated Queen of Raw’s Materia MX software into its sourcing system to enhance the flow of materials data between platforms;
  • Increasing the adoption of cool transfer denim printing technology, , which uses high-fixation ink in place of conventional indigo dyes to dramatically reduce water usage compared to traditional denim washing methods, among Shein suppliers; and
  • A multi-year research partnership with academic institutions studying how to achieve commercially scalable production of recycled polyester fibers through chemical recycling. The research partnership was launched in 2023 and has since produced an experimental recycled polyester material;
  • A peer-to-peer resale marketplace that first launched in the U.S. and has since expanded to France and the UK.

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