We Fixed It, You're Welcome - Shein's IPO: Profit or Peril?

Starting point is 00:00:00 All right, here's how this works. In each episode, we pick a company we all know that has something going on right now. Then we put ourselves in charge and see if we can fix it. You'll be hearing from Melissa and Operations, Chino on people in culture, and me on marketing. My name's Aaron. As always, a quick disclaimer, we are going into this somewhat cold and nothing we say should be construed as legal advice, financial advice, or anything that would get us in trouble. These are our views and opinions. We're here to ask the kinds of questions everyone's thinking, have an engaging conversation, and maybe come to some conclusions that we feel are worth exploring. By the end, if we fixed it, you're welcome. All trademarks, IP, and brand elements discussed are property

Starting point is 00:00:53 of their respective owners. Welcome back to We Fix It, you're welcome. For those keeping count, this is episode number 18, and I think our track record as Fixers has been pretty solid. We've thrown ourselves headfirst into challenges that CEOs of those companies are probably losing sleepover. We've cleared huge obstacles on behalf of those companies to set them on a better track. We've yet to receive a fruit basket or thank you note, but we don't do it for the glory. We do it because a fearless fixer's work is never done, and that includes today. Which company, or maybe companies, are we here to fix, Melissa? And how do you say their names properly?

Starting point is 00:01:25 Thanks, Aaron. So fast fashion under fire. So can Shian and Tammu keep winning in a world that's watching? There's a lot of interesting information here, and I think we will have to dig into some really big topic. So for over a decade, fast fashion has dominated closets and check-out carts, turning trends into landfill-bound outfits faster than you can say $5 crop top. Sheehan led the charge blitz scaling from obscure app to global powerhouse by selling ultra-cheap, hyper-trendy clothing in record time. But now this seems to be coming apart. So Sheehan's looking to go public. It was

Starting point is 00:02:09 announced this morning that they are going to IPO reportedly in London while dodging a storm of allegations, such as ties to forced labor in their cotton industries, copyright theft from small designers. One designer found over 50 designs of hers used by Shan, and a mountain of environmental waste critics say is unsustainable. And I think there's been plenty of documentaries about floating barges with t-shirts and all the things that are going around the world. At the same time, TAMU, a newer juggernaut and maybe more well-known, just virally, from PDD Holdings, is exploding in Western markets with a different model. There is gamified shopping that turns scrolling into a dopamine hit.

Starting point is 00:02:57 I actually bought something this morning, I'm going to say. Not from them, but somewhere else. A marketplace model that avoids the direct production baggage and cutthroat pricing, the same thing. It's almost too cheap to believe, usually is. So despite wildly different approaches, both companies are reshaping how the world shops, and they're both under increased scrutiny. So today, why this matters is we're kind of at an inflection point. Shane is lobbying in D.C. and rolling out sustainability pledges.

Starting point is 00:03:27 Tammu's riding high with their viral Super Bowl ads and record download. but can either brand escape what's coming? And are we finally witnessing fast fashion's reckoning? Like, are we really going to be able to sustain that? So here's the hardest, hard truth. Consumers say they care about ethics, sustainability, and fair labor, but time and time again, they still click by now. So the question is, how do we balance our values

Starting point is 00:03:57 and our desire for convenience and cost? Chino, you want to start? mean, I think that, you know, when you think about somebody like Cheyenne, you know, like, definitely questions about labor practices and all of that. So tell us more from your perspective. Yeah, it's really tricky. And so for our listeners, Shan also sometimes pronounced as Sheen, that's what I've known them for, but it's Cheyenne as Melissa shared. You know, as somebody who loves, you know, to shop, right? It was really interesting, I would say, in the last, last like six or seven months because on TikTok there was this trend going on of finding

Starting point is 00:04:37 dupes for things where you know if you're going to shop at Zara which again is like another fast fashion brand they actually found the supplier on Cheyenne so there was this TikTok's trend where you can find the same product at a much steeply discounted rate compared to to where you would go to these bigger box stores that were also fast fashion. So think of your H&Ms, your Zara's of the world. And it was interesting because I remember speaking with a lot of my friends

Starting point is 00:05:13 and sometimes I buy a top or two at Zara every once in a while. You know, they have good pricing and all of that. But if I can get it on Cheyenne for half of the price for the exact same product, it kind of left us all in this ethic dilemma of we know it's not great. We know fast fashion is just going, you know, just adding to landfills, but at the same time, the price point for things where the dupes of the world or, you know,

Starting point is 00:05:45 maybe you feel a little better going to Zara, but in the reality, those same things in Zara going to that same landfill. So it's been an interesting moral dilemma. I had pause shopping on Shandis because some of the things when you would get them, not the best quality. of work, like it was kind of off. And so what I've turned to and I've seen another emerging trend, especially within kind of the Gen Z population, is thrifting, right? There's now become a resurgence on thrifting and going and finding something that's new or repurposing new things.

Starting point is 00:06:20 I'm getting into embroidery, like my new favorite hobby. And so, you know, taking some of the old pieces that I have in my closet and kind of repurposing that, I think, is becoming a bigger. trend, however, there's sometimes I still look at Cheyenne and I'm like, ooh, I could have got that for so much cheaper here. And I'm not going to lie, like that call to get that discount when we know that a lot of these bigger brands are not being sustainable or they're literally just buying from that same manufacturer. So it's hard. It's really hard. And I think for a lot of shoppers, and you know, when you look at Sheen, which is more clothing, then you have TAMU.

Starting point is 00:07:02 who is everything else. Like, and you can get shoe boxes. You can get a planter. You can get a whole house, I think. Right? I think there was like you can get these little tiny houses that you can build. So it's really interesting. And Aaron, I'm curious to get your perspective from like a marketing because, you know,

Starting point is 00:07:20 they're trying to IPO. They want to claim that they're sustainable. We all know they're not. There's no way you can be sustainable with that, you know, the sale. price with the market and labor. It's not this. The reality is this is not great for the environment. It's not great for the people that are working there. So how, even though they're lobbying, how do they kind of change their branding and to pretend in a weird way to be sustainable when it's fast fashion at the end of the day? That's a really big, very good question, very loaded question.

Starting point is 00:08:00 And I think maybe the news that came out today, which by the time this episode comes out will be in the world for a little while is the attempt to IPO in London, which is, and I don't know how that works from a corporate structure. If you're headquartered in China, how you cannot even IPO in London, I don't know the specifics of that. But that's a bid for legitimacy, right, to create some distance from the product origins. But we also have to remember that she doesn't, they don't make anything. So they don't, they don't create. They don't, so my understanding, they don't have factories. They don't own or operate anything with manufacturing. They've got something like 5,800 third-party contract manufacturers.

Starting point is 00:08:45 So they're a storefront. So do they, can they create a distance from, you know, if there are, and I don't know how widespread it is, There's been allegations that have come up, but can they create some kind of a buffer or a distance to say that we, you know, as a company here are our corporate policies and here are the things we believe in and we audit our suppliers every so often and, you know, weed out the bad ones. You know, that's how they can, I guess, create, protect their brand and just start to distance the company and the brand itself from the product. In a weird way, that's a weird thing to say. but I don't know. That's a tough one. Well, I think that's, you know, what we have found in not just this fast fashion world,

Starting point is 00:09:32 but overall, because I think you bring them up a really good point, Aaron, is that if they're not really actually making something, but they're selling it, so they're a marketplace, the marketplaces need to share the burden, right? So marketplaces profit from bad actors without accountability. There's no accountability. So the fix would be for them to vet these. require more ethical, transparent disclosures, remove, you know, vendors that they or producers

Starting point is 00:10:02 that they feel are not hitting their standard or, you know, what we're forcing upon them. And learn from like companies like Amazon and Etsy who are being pushed to clean up those marketplaces, right? Tamu, for example, won't be able to dodge that forever, especially with things getting super competitive with the uncertainty with tariffs then all of a sudden you've lost your marketplace advantage of selling a t-shirt for five dollars when it's now going to be tariffed it's going to be $15 and then you have to add shipping to that so now i might go down to my local store right yeah but can you i mean you have you have staple mall stores like forever 21 that say came out and said we can't compete we're really

Starting point is 00:10:51 losing our customer base. You have stores like Gap going up market. It's hard to blame, put those, shift the blame to consumers that see the, see the appeal of a $4 t-shirt or a $12 pair of jeans and get the gamification of it. You know, you spin a wheel and you get the dopamine rush. It's hard to blame consumers for saying I want that. And a certain percentage of consumers probably don't even care about the ethics of it. Yeah. I would say the same thing, right? That dopamine rush is really, you know, Yeah. And also, too, like, we know, we have to think about market factors, right? Inflation has been a huge challenge for, I think, every single market. And with the tariffs, it's really interesting. So I was watching a clip of a small business owner. She creates these really beautifully crafted boxes that are like memory. So it's really cool wooden case it comes with. You can add pictures and kind of sentiments of your life.

Starting point is 00:11:50 and that she's created like a little notebook for things where you can write down memories and it's, you know, it's a really beautiful kind of like family heirloam to create. She's American. With the kind of introduction of all these tariffs, she's like, sure, this, you know, I'm able to go to Team You or Sheen and, you know, purchase some of the plastic wrapping to put this in or this wooden box. You know, I can either spend $20 or spend $120 if it's in America. And again, being that it would be in America, you know, don't have the same type of wood. So it wouldn't be as great as quality. And I wouldn't be able to have the scalloping design. And she was just going over to the fact that, yes, although she is a U.S.-based business, small business at that, the cost to her to have the same supplies or something similar would be,

Starting point is 00:12:47 inordinate. Like she would not be able to afford it or it would go back to the consumer saying, okay, well, what used to cost you about $60, $70, I now have to, you know, charge you about $400 for the same thing. And that's not even putting into fact that the shipping costs. It's like 80. She's like, yeah, just even ship these things over or ship them out. It's another $80,000. And as a small business, I can't do that. And so TEMU and Shan have both kind of become. that outsource plays for small businesses to not so much drop shipping,

Starting point is 00:13:25 but kind of substitute for some of those smaller things, right? You can make a cookie, but how are you giving this cookie to somebody? It's usually these little plastic things. And if you want it custom, sure, you can do it in America or wherever is domestic to you,

Starting point is 00:13:39 but that cost is so much higher. And so you're eventually putting that cost and burden onto the consumers and in a world where there's a lot of inflation, there's a recession looming over people, it's very hard to tell consumers, well, I know it's not great, but, you know, do you want to spend, you know, 20 times the amount that you were normally spending on the same product,

Starting point is 00:14:04 or do you want to close your eyes a little bit in lack of the ethics? And so you bring up such a great point, Aaron, around, you know, putting the onus on consumers isn't great, I think specifically in this market. And with these tariffs, I think it's going to be also very interesting to see how Americans use T-Me and Shin because, yeah, now these same $4 T-shirts or these little plastic bags you could put your cookies in are going to be 145 percent more, and that's not including the shipping costs.

Starting point is 00:14:37 So an interesting time to talk about this very topic. Yeah, I mean, maybe it was or it has been a hack or a loophole or something that's getting tightened or closed because the downfall of these companies at the beginning was, sure, you know, you can buy what typically wholesalers buy will open it up to you, but you have to buy in bulk, you know, you have to buy dozens or hundreds of it. And if you're willing to do that, you get the discount rate. And, you know, shipping will take six to eight weeks. Now consumers don't want that.

Starting point is 00:15:09 Companies might be able to put up with that if they keep stock and inventory and things like that. But as the process got more and more efficient and the shipping time decreased and all those things that it became more and more convenient and customers could get the same inventory access to catalogs and things like that that they could that big companies could. Again, it's hard to put the blame on customers for saying, I just saw that at a store or an online marketplace, state side or, you know, where I typically shop, but I found out where they get it. I'm just going to go straight there. Yep, yep, you know.

Starting point is 00:15:44 And that window's narrowing of, well, can I? Is that still allowed? Should I? Yeah. Go ahead, Melissa. No, I was just going to say this is an interesting topic for this specific time because I think originally when we were thinking about this topic, we were really talking about like, what fast fashion and the climate and all of the waste and the gamification of

Starting point is 00:16:07 how they market it and people are just willing, you know, I'm, I have to say I'm not person like if it's an auction you always want to win you know that kind of feeling but now it's really getting down to this like regulatory and trans you know transparency and then tariffs and the pricing and like what makes them so attractive to people is like this they're so low cost right and that could be going away very quickly and if that does then they're going to be in a world of hurt so it's like the irony of Shan applying for IPO right now is like

Starting point is 00:16:47 crazy because that profit margin is going to be like so like maybe not there anymore right you know and so it'll be interesting to see what they you know what they have in their due diligence right as

Starting point is 00:17:03 you know I've been with companies trying to IPO and there's a lot of work that goes behind the scenes of that and so it'll be interesting to see what they have submitted as you know their financial backing and things like that because you know the things that we're talking about are things that also impact your overarching long-term sustainability of customers and return customers right is like people aren't clear where you know like with the labor issues like are they using forced child labor in Vietnam you

Starting point is 00:17:37 know, all the things like that. But to your point, Aaron, like, I'm still wearing my Nike's. I don't care, you know, or I'm still going to, you know, people are still buying those things, you know. And so is it really that we want to say that we're citizens of the world and conscious and, you know, trying to do all those things? Or is it really just that we want what we want, you know? Yeah. I'll take it for what it's worth. This is a web survey. came out on from omnis end but the the survey showed that the customers customers have already reduced their year over year spending at sheen tamu and and also alley express we haven't talked about alibaba as much but between 2024 and 2025 from at tamu daily shopping fell 17 percent sheen fell

Starting point is 00:18:26 41 percent and alley express daily shopping fell 38 percent and the same study said that 30 30 percent or nearly 30 percent of customers will reduce or stop shopping at these types of of online marketplaces if the prices rise. So we're already seeing a trend in effect. Again, Shane is trying to go more of a legitimate route by headquartering or IPOing in London, creating a little bit of distance. But, you know, I mean, is that enough?

Starting point is 00:18:56 What if they put up headquarters in, you know, Madison Avenue and created a, you know, a nice fancy building and, you know, became a mainstay of state side or, you know, U.S. culture. Does that make it better? Yeah. So there's two things here. I think the one is kind of the disassociation that we do as consumers when we're purchasing something, right? I don't know if anyone watched White Lotus, a spoiler. Yeah, you both. Okay, God, you both did. And Piper at the end of the season, I'm so sorry if any of our listeners are in the middle of it.

Starting point is 00:19:33 You should have finished it on Sunday. But skip ahead a minute. Or skip ahead just like one minute. But, you know, Piper came to this retreat looking to kind of distance herself from her very wealthy family. And at the end of the day, she kind of went back into her old ways and said, I kind of like the nice things. I kind of like the big shiny objects. And that is who I am. And I think going and looking at consumers as much as we would love to say, I want to be sustainable and like being very real with ourselves. again, especially in a time where there's a lot of market uncertainty.

Starting point is 00:20:09 You know, I know you share those numbers, Erin. Also curious, spending just in general is quite low everywhere else, right? And so it's hard to justify, you know, moving away from something that's cheaper, but you know those same manufacturers that are upselling you or those big box stores are upselling if you can go straight to the source. So there's that fact. But what's interesting right now is the first. fact that if these tariffs are quadrupling the price of something that you normally would have

Starting point is 00:20:40 spent $4 for, why the hell would you shop at Sheen or Timu? It kind of defeats their whole purpose and brand. And so for those two, and especially for Sheen that's looking to IPO, you are going to need to pivot your branding and really make a stance in the sustainability and, you know, showcase and say, hey, here's what we're doing. You know, we're starting, to do more audits of this because if you're telling me you've just lost kind of your point of differentiation, which was cheap things, and now those cheap things are going to be extremely expensive, why as a consumer do I come to you with all of that ethical baggage, right? The only reason I'm shopping there with all this ethical baggage is because it's cheap for me,

Starting point is 00:21:26 but if it's no longer cheap for me, I don't want to support you. So I think it's going to be really important for them to shift and, you know, in a weird way, greenwash. And I know that's not a great thing to say from a branding perspective. But as a consumer, I'd be more inclined to watch them make that pivot and say, hey, we know we've been a problem. Here's how we're fixing it. And here's what we're actually doing. And here's our multi-year plan to change that. Then I'd be more open to like, okay, it's a little bit.

Starting point is 00:22:00 more expensive now, but they're doing the right thing versus, you know, I can still buy the same thing at Zara and it's also still going to a landfill. Well, I think it's important to understand, too, that like the idea of greenwashing can backfire, like it kind of did with A-2 because they said, oh, we have this conscious collection thing, but it felt very inauthentic. It didn't feel real. And it lacked transparency. And so there were claims that they were like, back, you know, that it was like gaslighting, greenwashing, or funny. But other brands like Everlane actually do a much better job of actually showing you what the cost they are, you know, at every level, like cost of materials, cost of labor,

Starting point is 00:22:47 da da da da, da, da, so that you can see. And then they put their whatever profit amount on there. So you can see that like, okay, yeah, this T-shirt, I could get it, you know, at TAMU for, you know, $4, and I'm paying $29, and this is why, right? I do also think, though, you brought up something, Chino, that I think is also maybe one of the ways that they can kind of bring that sustainability back is like, you know, it's kind of broken is this idea of like fast fashion where you wear something, you, you don't even have to watch it, you just throw it away, right?

Starting point is 00:23:25 And then you go back and buy something else, right? another white t-shirt. So maybe making the resale, recycling the thrift, you know, generation, the thrifting era is really a big thing right now, repair part of the purchase experience and making that part of what they're known for. So like Zara does an in-store repair and resale pilot right now in the UK. H&M has done takeback boxes where they have them in the store. And Everlane, for example, has the same thing where they have it set up where you can actually, they'll give you an envelope and you can send it back to them and they'll resell it on like one of those marketplaces, right, that resell marketplaces for you. So I really think that like they have to think about

Starting point is 00:24:15 their model a little differently because they're going to be forced to do that. And again, the growth has been viral, but like at the same time there's to your, to the stats that Aaron you shared earlier, it's starting to slow down and people are starting to see that. I mean, I find it interesting. I have a college student and I have not bought her clothes since eighth grade. I mean, okay, undergarments, yes, but like other types of clothes, like anything else. Her prom dress, she thrifted for $10 and it was beautiful. And she had it taken in and I said, you know, maybe shoes, I could buy you shoes, you know, you don't have to buy used shoes, but she's bought, you know, all the things. And, you know, when I look at what she's wearing and like the kinds of things that, you know, she's getting, I mean, things with tags on them still.

Starting point is 00:25:12 Yeah. Yeah. And designer things, you know, Ralph Laurenne sweaters and things like that. And it's just crazy when you think about it. And you get, you know, like for her, she likes to cut things up and whatever, you know, like all kids. And to go to the thrift store and be able to get Ralfloran T-shirts for $2 each and then be able to shrink them, die them, cut them, whatever you want to do, it doesn't feel like a big deal. So I do think that's a way for the future, but for them with their model, like I'm very curious to see whether they're able to really go IPO, Aaron. I'm not really.

Starting point is 00:25:52 You're not convinced. I think this is a horrible time to do that. for them. I think that, like, there's so much uncertainty. Like, and they, like, the tariffs could kill them. I just, I don't understand how they, what, what financial model they're looking at. Like, yeah, I don't know. They were valued in the 2023. They did a fundraising round. I think they made, they raised three billion, and they were valued at 66 billion at this point, at that time. So I don't know what their valuation is going to look like now, to your point, Melissa, especially as things are very volatile right now. now that would be a pretty big factor in, you know, how successful that IPO is in

Starting point is 00:26:32 actually being, you know, carried out. Yeah. It's, it's, it's so small, right? The margins are. Yeah. Yeah. They're not, they're going to be non-existent with these tariffs, right? And so that's, you know, if we look at that and again, this is all like breaking news in

Starting point is 00:26:48 the last like day. Today they just announced this. The tariffs were, you know, 125% China has done to the U.S. US has said 145% to you. So it's a very weird time to be IPOing. And with these tariffs, again, their pitch was, we are going to sell you something that's maybe not the best quality, but for super cheap and that you can get by. And so where I find it's even harder to do the recycling program is because things aren't the best. the best well it's not a Ralph Lauren

Starting point is 00:27:28 T-shirt so if I'm going to if I'm able to get a $2. Ralph Lauren where I know okay it's you know often made in the U.S. or you know in France or somewhere where their standards their labor is done at a high you know a higher

Starting point is 00:27:44 quality of course I'm happy to thrift that but I'm not going to thrift a two dollar shirt from Cheyenne because first of all it wasn't great quality to begin with because it's done with forced labor often and sometimes even child labor for some. And so I think the only way they can combat this, and again, I don't like to use the term greenwashing. It's like you need to do a green dry. Maybe that's a new term of like you need to actually

Starting point is 00:28:09 walk the walk of you need to be able to show us similar to an Everlane of like put your money where your mouth is and and, you know, have some integrity in terms of the transparency and how these things are made. Where do these things go? And if you can show us, because I don't want to, you know, again, we've had it so many times where people say something and it's not actually the case, you are a fast fashion brand. That is who you are. You can't pretend that that's different, but how are you trying to break that mold and do something better in an industry that we know is ruining this environment, right? Ruining child, you know, labor in third world countries. And so if you can show us that you're doing something differently, as a consumer,

Starting point is 00:28:53 I'm going to be a little bit more inclined to, you know, get a variety of different things at a higher price now, knowing that you're actually trying to change something or you're doing something about it, not that you're trying, you're doing something about it. And that's the only way I feared. I feel that they're going to be successful with an IPO in kind of the Western world. Otherwise, you're kind of screwed. I agree. I have to say to protect us that a lot of the labor practices are alleged and may have to do with the supply chain and not necessarily the company itself, which again doesn't make, doesn't make a thing. And Sheen does say they have a zero tolerance policy for forced labor and child labor in its supply chain. So. Yeah. And I think that like,

Starting point is 00:29:39 Chino, you really kind of hit it. You know, there's some pros about them going public IPO. And they did obviously get approval from the UK financial conduct authority. because you can't file unless you get that, but they still have to go through China's securities regulatory commission or whatever that's called. And I think that that's going to be interesting because they actually need the IPO and the capital for further expansion,

Starting point is 00:30:13 and also those funds could help invest in sustainability initiatives, like we've been talking about. And because right now, there are, they are the dominant player in fast fashion. That's why they're trying to do this because they're going to, they have significant revenue right now and a huge customer base, right? Global customer base. But specifically, those issues that they're going to have to deal with are the regulatory

Starting point is 00:30:39 issues. And to your point, Aaron, whether it's who they partner with and how they're doing the work, they felt they are going to face the scrutiny, right? and environmental concerns and labor practices, all of those, which impact investor confidence, right? So that's where I'm saying like, ooh, this seems like a weird time to be doing this, as well as all of the geopolitical risks with the tariffs and everything else going on and trade tensions and things like that. This could really affect their profitability. So they're kind of like in this weird catch-22 where like if they could get the funding,

Starting point is 00:31:16 it could maybe help the consumer feel better about what they were doing and how they were growing and that they were growing with intention and a conscience. And yet, you know, it's one of those things where they actually, but they need to capture that investment right now. So I don't know. It seems like a really odd, like I said, really odd time. And I think, you know, we've talked about this. They, you know, from a customer's perspective, it's hard.

Starting point is 00:31:46 There's a dopamine hit. It's the cheapest option for a lot of people. That's the best option, you know. And a lot of these regulatory issues feel like they're far away issues. When you're wearing a, you know, $12 swimsuit, you're like, I don't really think about that, right? Well, Melissa, you were presenting the recycled, you know, thrifting as a viable option. And, of course, recycled goods is a great way to keep them in circulate. and good for, you know, it's not counted in the economic, big numbers, but it's good for the economy.

Starting point is 00:32:23 But a lot of the, there's also more of a legitimate secondhand market now, you know, you have stores, the online storefronts dedicated to those too. So if that was a loophole with the $2, you know, designer t-shirts that could be closing too because there's more of a reuse culture now, which is ultimately a good thing, but as a $2 t-shirt, going to be $2 for long. Probably not. Yep. Yep. I do think that the other thing is really is, again, just the regulatory issues.

Starting point is 00:32:55 I think that, like, they need to address them before they get attacked for all of those things. And I know that there's, you know, murmurs of all, like you said, all these alleged practices. But like, if they could get ahead of that, that would really be important, you know, and not be faced with, like, some of the scrutiny of, like, H&M and, others where they're like, we know this is happening and you're not doing, or you're saying this, you're posting something in your stores, but it's still happening. So like, I think they're going to have to figure that out. And I think where they have a leg up on like the H&M and the Zars of the world is she and both Timeu are at like they're there, they're at the center of these

Starting point is 00:33:39 manufacturing places, right? They have those partnerships. And it's not one or two partnerships, right? it's thousands. So maybe they say, okay, everybody that, you know, we partner with us, a third party, if you don't have the standard, we're done. We're walking away. It's good. Okay, you don't get the blue shirt, but you have the yellow, pink, orange, everything else, but you don't have that.

Starting point is 00:34:03 And again, holding those third parties to that standard and saying you're either going to shape up and, you know, make sure you're hitting these regulatory things that you need to, or we don't work with you and you lose that market, you lose that profit. Again, if we are the global leaders in this and consumers are shopping here, you want to partner with us.

Starting point is 00:34:26 And using that as leverage is huge. And again, again, like up compared to the Zars and the H&Ms of the world. I think that's another opportunity for them to show that they're not just greenwashing. It's like, I'm going to say green drying. Like you're going to stick the paint on and actually hold to what you're saying

Starting point is 00:34:43 because that's what we need to see, particularly with this geopolitical environment that we have right now, you're not going to have being the cheapest. I think as of probably by 12 p.m. PST, that's going to be the case anymore today. So how are you going to pivot? Yeah, I 100% agree with you. I think that the thing is they're in the driver's seat because they have the global base of customers. so they can drive what the requirements are for their partners and vendors, right, and who they're use and their supply chain. So they really can say, we're not going to do business with you,

Starting point is 00:35:25 and we're just going to turn around and go to do business with someone else, right? And I do think that, Erin, you also brought up the really good point about the thrift culture. This is a huge thing right now. Like, you know, if anybody has kids, teenagers or above, that's all they do, thrift. So it would be interesting for them to work with designers and people like that that could actually make these recycled pieces from their current, you know, like if, like if H&M has that recycle box in their stores, right? And you bring things in and then you get like a, I'm making this up. I don't know what it is, but like a $2 credit for every T-shirt you bring in, then wouldn't it be cool if they had partnerships with these really big time designers. that made something from these t-shirts, like a dress or whatever it might be and sold some

Starting point is 00:36:18 of these things. And that would be, I think that would be really amazing. I mean, for people to be able to see how you can actually refurbish, reinvent fashion in a way that's really sustainable. And it's, and it's, and it makes you feel good, right? And then if you're partnering with designers, you can charge a lot more. Exactly. But also, Another opportunity, too, I just came up with this as you were chatting, is, you know, fabric stores, right? Maybe I don't want this T-shirt like this. Again, it's still the quote, but the fabric itself, like there's a whole market for that. And maybe we recycle it so we can bring it back to fabrics for so people can remake whatever it is that they want to do.

Starting point is 00:37:02 Versus just it being fast fashion or, you know, a top, maybe it's, you know, helping weave a new blanket or something like that. And maybe from like a experience, as we always talk about creating a consumer experience, maybe they have these Shien pop-up stores where, you know, you can go in and learn how to sew. Like, again, I'm trying to take up embroidery. I try to knit by myself a few weeks ago. Horrible. But if there was somewhere I can go and like learn how to do these things, you know, maybe it's just like those fun little experiences again and to help build their brand and to regain that trust where it's like, okay, yes, we know we're this. Here's how we can do it better. I love that. I do too. Yeah. And I like everything you're saying about the accountability and

Starting point is 00:37:52 transparency and holding their suppliers, you know, to a higher standard with the understanding that anything they institute operationally to do, you know, surprise audits or anything that contributes to their process, there is going to be a, I mean, there's going to be a rising cost anyway, but consumers are going to have to pay more for it. Yep. All right. We are getting the wrap up. I'm going to throw a fix at you too because, you know, I love what you're saying about

Starting point is 00:38:22 the pop-up store. I'm going to, I'm going to build off what you said. A $66 billion company should have a retail presence. And I don't know, I don't know if this will happen, but I like the idea of the legitimizing. I like the idea of bringing, bringing, contributing to the state. If you, if you're a market estate side, contribute to the, the, the, the, solution and and I envision you know we talked about this as a TikTok on the TikTok episode maybe some

Starting point is 00:38:48 kind of co-ownership I don't care if they go IPO on NASDAQ as long as they become a citizen here you know meaning in the U.S. economy but put up a flagship store in Times Square you know put up a Temu store and put up a sheen store across from each other but use it to to not only sell merchandise But I went to last summer, I went to Hershey, Pennsylvania, I went to the Hershey store. And I learned about their, you know, how they, how they farm and where their suppliers are and things. If they're really going to commit to something that, the standard that we're telling, we're saying that they should for their suppliers. Use those store locations to collect, like you said. Yeah, exactly.

Starting point is 00:39:32 Put the bins out. Teach people what to do with their, you know, how to build blankets from your old, your old, t-shirts, all those things, and talk about your sustainability practices and the 10 factors you hold your suppliers accountable to and things like, you use those storefronts as as branding, as advertising, and to show that you have corporate values that resonate with, you know, with consumers and you're doing good. Love the all of that. I love that because I think it's really about building transparency, making good choices,

Starting point is 00:40:04 raising the bar. And then I love the idea of building like some kind of the pop-up idea. Chino, that's a great idea. But like I already see it like where you take a t-shirt and make a tote bag, right? Like, exactly. And you don't even have to have like sewing materials. You could not do knots, whatever it might be. But it's just a really cool idea.

Starting point is 00:40:25 And then telling the stories, I think, is really important behind the fashion. Because I think that's the thing that's going to be, continue to drive the culture. we need to like really be able to connect it so that it's not just I got I have a four dollar white t-shirt but there's a story behind it and this is the story and and I think that will also help them sustain through rough times like this geopolitical climate right now where you know tariff on tariff off tariff on tariff off and you know going through all of that is being able to kind of derive their own narrative instead of falling victim to people canceling them or whatever might happen along the way.

Starting point is 00:41:08 So love those fixes, you guys. Completely agree, Melissa. And we know prices are going to go up. We know consumers are going to pay more. So would you pay more in a retail environment or you felt good about shopping there? And you're also saving, you know, compared to what you would pay at a similar store. I think it's, you know, we have malls across the country that need help. They're struggling.

Starting point is 00:41:30 Yeah. There's an abundance of space available. I think, I think, you know, if we can get around the regulations and the, you know, the strain politics, I think it's a win-win for everybody. I agree. And I guess my last kind of point on this is they need to get in the driver's seat of the of being, they need to be in the driver's seat when it comes to being transparent, right? If you hold your suppliers accountable, right, and say,

Starting point is 00:42:00 this is now the new standard. If not, you don't work with us. You're going to want to work with us. They're going to fix it, right? So immediately you're changing the name and phase of fast fashion as we know it. You have pop-ups shows so that as consumers, we trust you. You're telling us your banser, we can see where it is. There's maybe a video in the background of some of the manufacturers that you have.

Starting point is 00:42:23 You know, I can now bring in that $4, now maybe $8 white t-shirt. But guess what? I can actually embroider it, my own name using old materials, right, so that it's custom, right? Uniquo has done something very similar to this, right? You do not, fast fashion is not going to go away anytime soon, but we can make it better. And if you can be in the driver's seat of that innovation,

Starting point is 00:42:49 I do think it will be a huge brand reckoning for the sheeans of the world, the T-Muse of the world. And also, too, as someone who sometimes needs something right now, I'd rather go into the store and get it and not have to wait six weeks and hope that nobody's a, you know, porch pirate and my things come when I need them. And I just think we've really provided some great solutions that they can use and leverage. And if they don't, it's going to be tricky. So hopefully someone from Sheehan or Tini is listening because we've got some good ideas. That is brilliant.

Starting point is 00:43:25 And we'll see what happens by the time this comes out. It is a breaking story. And that does it for another We Fixed It, you're welcome. Remember that we are fearless, no fixes too daunting, no company too big. So who should we tackle next? Keep sending us your fixes at we fixeditpod.com or email us MyFix at we fixedetpod.com. And we will see you next time. This podcast is produced by straightforward media group, all rights reserved.

Starting point is 00:43:51 If you'd like to learn more about how a podcast can help your company establish authority and generate leads, please email us at, Eric at straightforwardmg.com or go to straightforwardmg.com for more information.

We Fixed It, You're Welcome - Shein's IPO: Profit or Peril?

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