Shein is winning over American consumers but not the National Retail Federation

The Chinese founded fast fashion chain She In has been on the fast track for a US IPO, trying its best to win over investors, regulators as well as the broader retail industry. So far, though, the charm offensive has failed to win acceptance from the National Retail federationcnbc.com retail reporter Gabrielle Fonrouge is tracking that story. What's the hold up here? So Sheehan has tried to become a member of the National Retail Federation multiple times. It keeps getting rejected. We don't actually know why. What my sources have told me is that there's somebody with sway within the organization that is against it. And let's break this down a little bit. The CEO of the NRF is Matt Shea. Matt Shea, We don't actually know who decides who becomes a member, but Matt Shea keeps close counsel with his board of directors on the NRF. There's a lot of board of directors, but there's also an executive committee and there's also a leadership committee. There's a lot of retail executives on those committees. You've got Walmart, you've got Target, Macy's, Levi's, Albertsons, some luxury players, LVMH. So whether or not those executives are against this and are holding it up, we don't know. But we do know they keep close counsel with him. It is called the National Retail Federation. So I guess the question is it's kind of like the GDP GMP. Are we defining this like within the borders of whose opera? But you mentioned already other foreign brands that have become part of this. So would she and be unusual and being a foreign brand that was excluded or would it be unusual in being a foreign brand that was included? So it would be. It's hard to say because like you said, we've got LVMH on the board already. Adidas is a member. If you're doing a lot of retailing in the US, you can be part of the NRF. That's what board members that I spoke to told me. As long as you're primarily engaged in retailing, you know Sheehan's largest market is in the United States. So it does raise the question, are you only excluding this retailer because they were founded in China And then also you know NRF is they tried to make money as well. They, you know, they make their money by membership dues and what these board of directors told me they're trying to grow membership right now and they want to expand internationally. So where do you draw the line? I guess the the bottom line question is who cares Why? Why would Why would Shannon care? Tyler, there's a very important reason why this matters. Sheehan wants to go public in the US and nobody really likes Sheehan in the US. It has to win over lawmakers, It has to win over regulators and of course the broader retail industry. It's been on this charm offensive. It's been trying to convince everyone that it can be trusted on American exchanges if it earns a stamp. Trusted with US customer data mostly or or for investors with all of it, if it can be trusted as an American public company, if we can trust what they're putting in their regulatory filings, things like that. If they earn a stamp of approval from the National Retail Federation, it is the largest retail trade association in the country globally as well, we believe. And they have Walmart, Microsoft, Google. They have the largest tech companies and retailers on the planet. If Sheehan is sitting at that table, that could legitimize it in the eyes of regulators. And so they become a part of a fraternity, so to speak. In other words, it gives them a kind of power. One of the concerns with she, and am I correct or incorrect, is the sourcing of some of the garments. That is absolutely a concern. And that's one of the main things that, you know, lawmakers are talking about. They want to make sure that Sheehan is sourcing its goods from areas where forced labour is not an issue. But that's where a little bit of this hypocrisy comes into play. This is something we've talked about before on this show. Forced labour in raw materials is a problem across the fashion industry and a lot of the mega corporations that are on interrupts board have faced these same kind of issues. Look at Nike for example. One of Nike's executives was on the board of the NRF Foundation a couple of years ago when she and went under investigation by House lawmakers. Nike got to cite the same letter. So did Adidas. So interesting. And T Moo, do you know, are they have they tried to become part of the NRF? Are they involved at all? T Moo is a black box. They don't like to talk to us. It's They have not done anywhere near the sort of charm offensive that Sheehan has done. Sheehan has really tried to ingratiate itself with American regulators, with American retailers, with the public, with the media team. Oh, not so much so we're not sure about them. Wonder if it'll just be a matter of time. Still fascinating. Hold up, Gabby. Thanks for bringing that to us. We appreciate it. Gabrielle Phone Rouge.

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