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Fast-fashion giant Shein expanding to downtown Bellevue as U.S. push intensifies

By Renata Geraldo, The Seattle Times
Published: February 8, 2024, 7:53am

Shein, the Singapore-based e-commerce and fast-fashion giant, will open an office in downtown Bellevue, the company said Wednesday, marking some good news for Bellevue’s uneven office market.

The nearly 10,000-square-foot office at Key Center will serve as a hub for Shein’s U.S. fulfillment and logistics operations as the retailer seeks to localize and speed up delivery times for U.S. customers.

One of the fastest-growing fashion retailers in the world, Shein’s Seattle-area office is the latest step in the company’s U.S. expansion. The company, which has drawn criticism for its labor practices, is rumored to be preparing to go public on a U.S. stock exchange.

Shein’s core business is low-cost, on-trend clothing, marketed toward younger shoppers. While primarily an online retailer, Shein has opened pop-up shops in recent years.

The company said it expects 50 employees to work from the new space by the end of this year and is hiring for positions in logistics and distribution. Shein has a growing U.S.-based workforce of more than 1,500 employees, according to the company.

“This expansion underscores our commitment to efficiency across our operations, and we look forward to contributing to the local community and fostering innovation in the heart of the Pacific Northwest,” Andy Huang, Shein’s head of U.S. fulfillment and logistics, said in a statement.

Besides its main hub in Los Angeles, Shein has satellite offices in Washington, D.C., and Philadelphia. It also has warehouses in Indiana and California, as well as third-party-operated warehouses. Outside the U.S., the retailer has key offices in São Paulo, Dublin, Singapore, Paris, London and Guangzhou, China.

Shein has not announced a Seattle warehouse.

The retailer previously came to the area with a four-day pop-up store at Westfield Southcenter Mall in Tukwila in June. According to the company, the event became one of its most-attended pop-ups in the U.S. with more than 11,000 visitors.

Valued between $45 billion and $55 billion, according to Bloomberg, Shein has been described as the fastest-growing fashion retailer in the world. The China-founded company confidentially filed for an initial public offering in November and could become publicly listed this year. Shein declined to comment on IPO speculation.

Shein makes inexpensive clothing with small-batch, on-demand production, with some dresses costing less than $10. Shein is able to make inexpensive garments because its vertical integration allows for less waste than the industry average, said Rui Ma, an angel investor and China tech analyst for industry newsletter Tech Buzz China.

“They have their software that is in the whole supply chain,” Ma said. “The system is basically telling the manufacturers how much to make and what to make. … It just requires so much operational detail.”

The retailer’s U.S. success has not come without scrutiny.

In May, Congress members urged the Securities and Exchange Commission to require Shein to disclose potential forced labor practices before an IPO. That same month, the House Select Committee on the Chinese Communist Party accused Shein of using forced labor from the region of Xinjiang in China, which would violate U.S. law.

A company spokesperson said Shein has a zero-tolerance policy for forced labor. “We are committed to respecting human rights and adhering to local laws in each and every market we operate in.”

Besides accusations of forced labor, Shein was the subject of a British documentary about labor abuse. The company said an independent investigation found employees at two of its Chinese sites were working longer than allowed, and it pledged to invest $15 million to improve standards at its supplier factories.

According to Shein, its fully integrated supply chain limits excess inventory and reduces production waste. Shein also said it is committed to reducing its supply chain carbon emissions by 25% by 2030.

Shein’s move to Bellevue is good news for a struggling office market but not enough to represent an uptick, said Colliers research manager Jacob Pavlik.

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Bellevue’s downtown core had a 20.7% vacancy in the fourth quarter of 2023, according to his research. That’s a significant increase from the fourth quarter of 2022, which had a 5.7% vacancy rate. Pavlik said this rise is in large part due to Microsoft not renewing leases in Bellevue.

Shein is not the only company to announce a move to Bellevue. In January, the Puget Sound Business Journal reported TikTok was doubling its presence downtown by taking up Microsoft’s former space. The lease totals over 132,000 square feet. Last month, the Registry reported Pokémon would take an additional 374,000-square-foot space in Bellevue.

The market could turn around with more tenants leasing more than 100,000 square feet, said Gary Guenther, Kidder Mathews Bellevue’s executive vice president and managing director, in an interview.