The fast-fashion giant uncovered the child labor issues in China during its sourcing audits between January and October 2023, it said in a new sustainability report.
It is unclear if the cases involved two children or two instances of suppliers employing several children, defined as under 16 years old, according to Chinese law.
“Both cases were resolved swiftly, with remediation steps including terminating contracts with underage employees, ensuring the payment of any outstanding wages, arranging medical checkups and facilitating repatriation to parents/legal guardians as needed,” the report read.
Shein suspended the suppliers for 30 days and terminated contracts with the underage workers. Shein updated its terms to immediately terminate suppliers found using forced or child labor in October.
The report also noted a now-resolved instance of workers in a Guangzhou, China factory not being paid wages on time.
A spokesperson for Shein declined further comment.
IPO dreams
The sustainability report comes as the Singapore-headquartered company gears up to go public, likely in the UK.
Earlier news about a possible initial public offering in the US led to intense pushback, including about the company’s Chinese roots.
Public companies have far more stringent reporting requirements than private companies and often face more public scrutiny. Ahead of any initial public offering, the company that has played its cards close to its chest is showing more of its hand. Prior to 2023, Shein only reported labor violations as a percentage of audits.
Shein is one of the biggest fast-fashion players in the US, with a $100 billion valuation in 2022. At the time, it was the world’s third largest privately-held company, behind TikTok owner ByteDance and Elon Musk’s SpaceX. The Financial Times reported that Shein made $2 billion in profit last year.
Shein is known for its ultra-cheap clothing and accessories, which has drawn criticism for a plethora of problems such as exploiting workers, failing environmental regulations, selling clothes containing hazardous chemicals, and plagiarizing designers and artists.
Last week, South Korean health authorities said that shoes from Shein contained toxic substances at levels that were hundreds of times higher than legally permitted, the South Korean health authorities said. Large quantities of phthalates, a chemical compound that makes plastics more flexible, were found in some pairs of Shein shoes.