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Superdry PLC (LSE:SDRY) chief executive Julian Dunkerton has criticized fast fashion company Shein Group over what he described as a “loophole” allowing the firm to avoid taxes on goods shipped to customers in the UK. In an interview with BBC Radio 4, Dunkerton voiced concerns about Shein’s ability to bypass import duties on low-value parcels sent directly to UK consumers. Goods under £135 are exempt from import taxes, a rule that benefits companies like Shein, which sends low-priced products directly from overseas.
Dunkerton argued that the UK government is “essentially” permitting Shein to operate as a “tax avoider,” despite the company's billion-pound turnover. He emphasized that the current tax regime is unfair to larger companies, allowing Shein to thrive without being subject to import duty, VAT, or potentially even an environmental tax. Dunkerton called for stricter regulations that would require companies of Shein’s size to contribute more in taxes, aligning with the contributions expected from larger UK-based retailers.
Shein, which began in China before relocating to Singapore, has recently been preparing for a potential stock market listing. Though initial plans suggested a US listing, reports now indicate that the company may target London for its initial public offering (IPO). Dunkerton’s comments come amid rising concerns from retailers in the UK, EU, and the US, who argue that low-cost Chinese firms, including Shein, are undercutting them by taking advantage of these tax exemptions.
Shein has responded by stating that it complies with all UK tax regulations. Meanwhile, a UK Treasury spokesperson defended the existing tax system, stating that it aims to balance reducing burdens on businesses and consumers buying lower-value goods from overseas with the interests of UK-based businesses.
As Superdry navigates its own challenges in the competitive retail landscape, Dunkerton’s remarks highlight broader industry concerns about tax fairness and the competitive pressure posed by fast-fashion giants like Shein. The debate underscores the growing tension between traditional retailers and online fast-fashion platforms benefiting from tax exemptions on low-value imports.
