Fast fashion giant Shein has been rapidly expanding production in Brazil, where 100 factories already produce for the online retailer, since it announced plans to invest $148 million in the region a month ago.
It’s part of a larger plan to expand production outside of China and embrace rapid growth in Latin America, said Marcelo Claure, Shane’s regional president and company shareholder.
“I invest in companies that I can help,” Claure told Bloomberg News. “Shane fit the type of company I was looking for, which was a global company, a highly disruptive company.”
Shein, which currently makes almost all of its products in China but sells almost nothing to Chinese customers, is looking to localize production in fast-growing regions to lower distribution costs and speed up delivery times. The company announced in April that it would partner with 2,000 Brazilian textile mills over the next five years, and it has announced similar plans in India and Turkey.
“Latin America plays an important role in Shane’s revenues. It’s definitely one of the fastest growing regions in the world,” said Klure, who has invested $100 million in the company. He noted that Shein’s is one of the most downloaded apps in Brazil.
Claure, 52, was SoftBank founder Masayoshi Son’s deputy until January 2022, when he left the Japanese investment firm amid a dispute over compensation. As SoftBank’s chief operating officer, he led turnaround efforts at several of the company’s more complex Vision Fund investments, including Sprint, now T-Mobile US Inc. and WeWork.
Born in Guatemala to Bolivian parents, Claire moved to the US to attend college in Massachusetts. After graduation, an opportunity arose to buy the cellphone store Brightstar, a global telecommunications equipment supplier, which he sold to SoftBank a decade ago.
Since splitting with Son, Claure has been doing deals through her family office, the Claure Group. Last year, he started a division at Claure Capital that focuses on public and private investments.
Claure Group, which manages $3.3 billion, will invest in Latin American companies that are “disrupting traditional business models,” Claure said. Shein, which is headquartered in Singapore, was Claure’s first significant investment since the split with SoftBank, he said.
While Shane has been praised for its fast-growing business model, it has also come under scrutiny for its poor factory conditions and large carbon footprint. Kluhr said he took a two-week trip to China before investing in Shane to talk to workers and tour factories he outsources to. He added that Shane “sets very clear rules” regarding wages, labor and material supply, and that Brazil would replicate the model used in China.
“It was encouraging to see people happy with Shane,” Cloure said.
Report. Shane raises $2 billion at a lower price
The Chinese fast fashion behemoth’s latest round of funding brings the company to two-thirds of last year’s $100 billion valuation, according to the Wall Street Journal.