Julian Dunkerton, founder and CEO of fashion chain Superdry, has accused rival Shein of exploiting tax loopholes to gain an unfair advantage. In an interview with the BBC, Dunkerton stated that the fast fashion giant benefits from not having to pay import duties on low-value parcels sent directly to customers from overseas.
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Shein declined to comment on the accusations but previously claimed that its success was due to an efficient supply chain, not tax exemptions. The UK Treasury has stated that tax policies must balance the interests of consumers and retailers.
However, Dunkerton argued that eliminating this tax loophole would benefit the UK. “The current rules aren’t designed for a company sending individual parcels and making billions in the UK without paying tax,” he emphasized. “We are allowing a company to essentially dodge taxes.”
Under current regulations, shipments worth less than £135 sent directly to UK customers are exempt from import duties, while larger consignments are taxed. Before the rise of the global online marketplace, this tax exemption had little impact. However, retailers in the US and the EU are now increasingly undercut by low-cost Chinese competitors like Shein, causing state treasuries to miss out on potential tax revenue.
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Dunkerton also criticized Shein as a “complete environmental disaster.” He urged the government to make Shein pay import duties, VAT, and possibly even an environmental tax. Shein has previously stated that it fully complies with its tax obligations in the UK.
Founded in China but now headquartered in Singapore, Shein has been preparing for a stock market listing, which has brought its practices under closer scrutiny. The BBC reported that Shein filed initial documents for a London listing earlier this year, following a failed attempt in New York that faced opposition from US politicians.
US lawmakers expressed concerns about the company’s “deep ties to China.” Shein has also been accused of using forced labor in parts of its supply chain, which the company denies, asserting it has a “zero tolerance” policy on forced labor.
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Shein claims its “test and repeat” model, where items are produced in small batches and reordered based on customer demand, results in less waste compared to traditional retailers. However, it has faced criticism for promoting a culture of disposable fashion through low prices and “gamified” social media strategies.
Julian Dunkerton, who founded Superdry over 20 years ago, is working to turn the company’s fortunes around. Once valued at £1.8 billion in 2018, Superdry has seen a decline, and in July, it delisted from the London Stock Exchange after nearly 15 years. The company’s shares now trade on an alternative market, and it is valued at less than £10 million. Dunkerton confirmed he would attempt to take the company private again in the near future.
