Shein, the Chinese fast-fashion retailer, is pursuing a strategy to move upmarket in response to shrinking margins caused by US tariffs and rising import costs. The company’s chairman and chief executive, Chris Xu, cited persistent external uncertainties related to tariff policies and logistics expenses that are expected to continue through the latter half of 2026.

Xu emphasized the importance of the upcoming fourth-quarter sales period, which includes major promotional events such as China’s Singles’ Day on November 11, as well as Black Friday, Cyber Monday, and the Christmas shopping season. He expressed confidence that this window would generate a significant increase in order volumes.

To enhance profitability, Shein aims to diversify its product offering by including more brands and items at higher price points. The company noted that this shift in product mix would lead to an increase in the platform’s overall average selling price, thereby offsetting some of the pressure from tariffs and other costs.

In line with this strategic pivot, Shein recently acquired Everlane, a US-based apparel brand, for $78 million. This acquisition represents part of Shein’s broader effort to broaden its market presence and appeal to customers seeking more premium products.

Financial results for the three months ending June 30 show a marked improvement, with Shein reporting net income of $2.4 billion, a significant turnaround from a net loss of $99 million in the previous quarter. Net revenues edged up by 0.9 percent year-on-year to $11.1 billion, indicating steady sales growth despite the challenging external environment.