SHEIN Catching a RICO & The Future of Fast Fashion

OVO, East End, Reps Up, we might just get hit with the R.I.C.O.

It was only a few weeks ago when “Confidence Activist” and influencer Dani DMC was the scapegoat for the egregious practices of SHEIN, the fast fashion retailer. Dani DMC and many other influencers were thrown into hot water after being flown out to China for a PR trip that included the influencers touring one of SHEIN’s factories (probably a PR factory built for such reasons), a lunch in which influencers could ask the C-Suite team questions, and even more outrageously, participating in “play” factory work. This tone-deaf PR stunt came after numerous reports of nasty business practices such as 75-hour work weeks, creating swastika jewelry, and selling Islamic prayer mats passed off as “decorative rugs”.

I will save my gripes with SHEIN for a little later.

Most recently, SHEIN has been accused of violating the RICO Act in a new lawsuit. Three designers (Krista Perry,

Jay Baron, and Larissa Blintz) who filed a lawsuit against the retailer in California are suing the company for stealing their graphic designs and subsequently damaging their small businesses. To produce such a colossal volume of products, SHEIN uses a form of copyright infringement to produce upwards of 6,000 items each day for its customers. The products in the lawsuit claim are described as “truly exact copies of copyrightable graphic design.”

Essentially, SHEIN is retailing not slightly altered copies of an original design but instead are the exact copy of a copyrightable design. The designers who were copyrighted found that filing a lawsuit was cumbersome and it was difficult to find a person to sue. When designer Krista Perry filed a complaint with SHEIN, it responded with an offer of $500, told Perry this was an unusual occurrence, and acted as if they were a mom-and-pop business, not a large retailer that knows what they are doing. When caught, the designer will often accept a small payment from the company and SHEIN apologizes to and tells the designer they only produced a few copies of the design.

The RICO Act or the Racketeer Influenced and Corrupt Organization Act of 1970 is meant to target the exploitation of legal businesses by organized crime. In the past, the RICO Act has targeted white-collar or illegitimate crimes. That’s why in the past we’ve seen a range of white-collar criminals or mob bosses get hit with RICO charges and most recently music groups, YSL and YFN have been hit with RICO charges. There needs to be potential evidence of organized (and alleged) crime. SHEIN is accused of violating the RICO Act for the reason of there is no culpable person to sue.

Not much is known about SHEIN’s nebulous CEO Chris Xu (Xu Yangtian) valued at over $10 Billion. Some sites claim he is a Chinese-American who studied at George Washington University and other sources claim he was born in Shandong and studied at Qingdao University of Science and Technology. Oftentimes, it is difficult for smaller designers to go up against the fast-fashion giant because of its decentralized system, making it difficult for designers to contact and sue the company. Even if this designer has an airtight case, infrastructure, and money to go through the legal system, it is hard to find an exact defendant. As a result, the claimants are alleging a violation of the RICO Act, which is "designed to address the misconduct of culpable individual cogs in a larger enterprise."

So contrary to popular belief, SHEIN wasn't hit with a RICO in the magnitude a criminal enterprise may be hit with (i.e. a Police Department charging an enterprise with RICO charges), but instead in the lawsuit filed against them, SHEIN is accused of violating the RICO Act of 1970.

With my own eyes, I have seen a few of my mutuals be ripped off by the fast fashion retailer. Beyond my experiences, I think we’ve all seen a story of SHEIN ripping off a smaller designer. For SHEIN to produce an exorbitant volume and reach annual sales of $30 Billion (more than H&M and Zara combined) cutting corners and stepping on toes is necessary.

I think there needs to be a bigger conversation about why clothing at such a low cost is normalized. Why do consumers feel entitled to constantly buy and buy clothing with zero disregard for how it is produced or the designers that were ripped off? We live in a capitalist society and we all participate in it at some level (I’m a business owner for God’s sake) but what’s to say we can’t be mindful about how we consume clothing? There is beauty in investing in smaller businesses, entrepreneurs, and creators.

It’s always disgusting to me when I see a small business owner on TikTok advertising their product at their price and comments are filled with complaints that said product needs to be cheaper or a dupe is necessary. It’s okay to not own everything you want and like.

WORKS CITED

Lieber, C. (2021, November 19). Report: Shein violating labour laws. The Business of Fashion. https://www.businessoffashion.com/news/retail/report-shein-violating-labour-laws/

Picchi, A. (2023, July 14). Shein lawsuit accuses fast-fashion site of Rico Violations. CBS News. https://www.cbsnews.com/news/shein-lawsuit-rico-violations/