Julian Dunkerton, CEO of the British clothing brand Superdry, has voiced his concerns over what he describes as unfair competition from the fast fashion giant Shein. Speaking to the BBC, Dunkerton claimed that Shein is “dodging tax” by exploiting loopholes in the UK’s tax system, and he’s urging the government to take immediate action.
Dunkerton explained that Shein avoids import duties by sending low-value parcels directly to customers from overseas, giving them a competitive edge over UK-based retailers. Shipments under £135 are not subject to import duties, a rule initially designed for low-volume, cross-border shopping, but one that has now been used to fuel a billion-pound turnover for Shein in the UK. He argues that this outdated exemption is undermining UK businesses and depriving the Treasury of potential revenue.
In response to these claims, Shein declined to comment directly. However, the company has previously stated that its success is due to an “efficient supply chain” rather than any tax exemptions. The Treasury, for its part, has maintained that tax policies must strike a balance between the needs of both consumers and retailers.
Dunkerton has not held back in his criticism, describing Shein as a “complete environmental disaster” due to its high-volume, low-cost production model. He proposed that Shein should be required to pay not only import duty and VAT but also a possible environmental tax. He believes this would level the playing field for UK retailers and address the environmental impact of Shein’s business model.
Shein, which was originally founded in China but has since moved its headquarters to Singapore, has been preparing for a potential stock market listing. The firm has filed initial documents for a London listing after a previous attempt to list in New York faced political resistance over its ties to China and alleged use of forced labour. Shein has denied these allegations, insisting that it has a “zero tolerance for forced labour” and fully complies with UK tax laws.
Dunkerton’s concerns are not isolated to the UK. Both the US and the EU are exploring tighter tax regulations to include direct-to-consumer businesses like Shein and other Chinese retailers such as Temu. Shein has defended its business practices, stating that its approach of producing items in small batches and reordering based on demand results in less waste compared to traditional retailers. However, critics argue that its low prices and heavy use of social media marketing encourage unsustainable consumer behaviour.
Superdry, once a high-flying brand popular with celebrities, has seen its fortunes wane in recent years. After delisting from the London Stock Exchange in July, the company is now valued at less than £10 million. Dunkerton remains committed to reviving Superdry’s fortunes and has not ruled out the possibility of taking the company private once again.
The debate over Shein’s business practices and the broader implications for UK retailers like Superdry highlights the need for updated regulations that reflect the realities of a globalised, digital marketplace. For now, Dunkerton’s plea for action against what he sees as unfair competition remains a contentious issue, one that will likely continue to make headlines as the fashion industry grapples with the impact of fast fashion giants on both the economy and the environment. For more information on UK import tax policies, visit the GOV.UK Tax and Duty page to learn about the regulations for goods sent from abroad
For more updates on the fast fashion debate and insights into the UK retail landscape, visit EyeOnLondon.
