Fashion designers Krista Perry, Larissa Martinez, and Jay Baron have sued China’s fast fashion online retailer shop, Shein. The lawsuit claims are in violation of RICO. Details explained below.
Shein is a Chinese online fast fashion retailer domiciled and headquartered in Singapore. Known for selling relatively inexpensive apparel, the company’s success has been credited to its popularity among Generation Z consumers.
Founded in Nanjing, China in October 2008 as ZZKKO by entrepreneur Chris Xu, Shein grew to become the world’s largest fashion retailer as of 2022.
According to Statista, Shein is one of the largest clothing distributors in the world. The database estimates that the company earned $15.7 billion in 2021, beating out popular retailers like Forever 21 and H&M.
However, on July 11, 2023, the company was sued by three independent fashion creators who claim the company has been copying their creativity. The company is facing a new lawsuit and its owner is at the center of it all. Read on for more about the operation.
What did Shein get sued for?
The owner of the popular online retailer, Shein, is being accused of racketeering and copyright infringement. In a complaint filed on July 11, three independent designers alleged that the company blatantly copied their creations. “Shein produced, distributed, and sold exact copies of their creative work,” the filing reads.
Creators Krista Perry, Larissa Martinez, and Jay Baron went on to suggest that their business sales were greatly impacted by the “copied items” that were instead sold by the retail giant. The complaint further alleges that Shein has a “long and continuous pattern of racketeering,” similar to that of an organized crime operation.
The lawsuit levied against Shein, suggests the company has a history of stealing from smaller creators. Krista, a designer from Massachusetts, allegedly saw her designs on two of the company’s retail sites and later contacted Shein to resolve the issue. In the lawsuit, Krista claims Shein offered her $500 for her design but she rejected their offer. The designers also accused Shien owner, Chris Xu, of creating algorithms to identify popular clothing trends, which the company later copied.
Who owns Shein?
The fashion brand is owned by a Chinese entrepreneur called Chris Xu.
Chris Xu, whose birth name is Xu Yangtian, remains out of the public eye and has not yet responded to the lawsuit. While little is known about the mogul’s life today, The Org reports that Chris was born in China in 1984. He graduated from Qingdao University of Science and Technology in 2007 and worked as an SEO specialist before discovering the value of online retail. He later created SheInside, his first online store which sold wedding dresses to customers outside of China.
According to Forbes, Chris started Shein in 2012 and has since garnered a $10.5 billion net worth. Reuters reports that Chris is a permanent resident of Singapore, but much of his personal life remains a mystery (per The Guardian).
SOURCE: GETTY
Shein has come under fire in the past.
The claims against Shein could mark a shift in the company’s business model. The lawsuit claims Shein’s “egregious copyright infringement” equates to racketeering, suggesting that the misconduct was committed by a “de-facto association of entities.” However, this is not the first time the popular clothing company has faced scrutiny.
In August 2021, Reuters reported that Shein made false statements about their working conditions and failed to include required supply chain disclosures on its website. In response to the controversy, Shein revealed a plan to develop “comprehensive policies,” which were later posted to their website. However, the drama did not end there. In October 2021, an investigation by Public Eye revealed that Shein employees in six different locations were working 75 hours a week.