Shein Accused of Using Shell Companies to Steal Designs in New Lawsuit

• Fast fashion retailer Shein was accused in a federal lawsuit of directly copying designers’ work.
• The lawsuit also accuses Shein of racketeering and claiming copyright infringement is central to the business model.
• Designers said after they confronted the fashion giant, they were given excuses, or a few hundred dollars.

Fast fashion giant Shein has been accused by three designers of stealing designs and using complex algorithms and third-party companies to clear their tracks in a federal lawsuit.

The civil lawsuit, filed in Los Angeles on Tuesday, claimed that the Chinese fast-fashion company, which lists close to 6,000 items on its app daily, stole exact copies of the designers’ works as part of a pattern of copyright infringement central to its e-commerce model — staying ahead on fashion trends for voracious consumers. 

Shein, one of the largest and most profitable fashion retailers in the world, was accused of repeatedly stealing designs, and blaming it on shell companies and third-party vendors it operates when confronted about the practice, the lawsuit alleged. 

The suit went on to allege that Shein’s practice of using a conglomeration to facilitate the copyright infringement amounts to racketeering.

“Shein has grown rich by committing individual infringements over and over again, as part of a long and continuous pattern of racketeering, which shows no sign of abating,” the suit alleges. 

A representative for Shein did not immediately respond to Insider’s request for comment. 

One of the designers suing the company, Krista Perry, claimed that after her poster design was stolen, she confronted the company. They said a third-party vendor was to blame, and claimed the product had low sales, per the lawsuit.

They also offered her $500, an offer that the lawsuit claimed was consistent with other designers’ experiences.

“Shein made its offer as if it were a mom-and-pop operation rather than one of the richest enterprises in the world,” the lawsuit states.

It’s hardly the first time that Shein has faced legal action related to allegations of copyright infringement.

Major brands such as Oakley and Ralph Lauren have sued the company on similar grounds — without the racketeering allegation — in the last year, per The Wall Street Journal.

This story is developing, check back for more updates.