Fashion retailer Shein discovers child labor in its supplier network.

The online fashion seller Shein has admitted it found two cases of child labour and factories failing to pay the minimum wage in its supply chain last year, as it tries to gain backing for a potential £50bn UK stock market flotation.

The disclosure, in Shein’s 2023 sustainability report, comes after workers’ rights campaigners called for the government to oppose a possible listing of Shein on the London Stock Exchange over concerns about a lack of transparency about its supply chain and ethical questions. The British Fashion Council (BFC) has also said the listing, which could be announced as early as next month, would be a “significant concern” to the industry.

An investigation this year by the Swiss-based non-profit group Public Eye found that people employed to produce garments for Shein routinely work more than 70-hour weeks; there were allegations of forced labour in the Uyghur region of China; and the company had a “cavalier approach to design appropriation”, which has led to a string of lawsuits relating to allegedly copied garments.

The company’s plans to list in New York were derailed after US lawmakers raised concerns about alleged labour malpractices and lawsuits from competitors. However, Shein has yet to face formal opposition in the UK. The retailer reportedly filed papers to float on the London Stock Exchange in June, and secured support for this from the Labour party weeks before the July election.

Shein, based in Singapore but founded in China, said it had tightened its policies for suppliers in October last year so that any child labour or forced labour violations have become grounds for immediate termination of contracts, as first reported by the Times.