The UK has become one of the biggest markets for ultra-fast fashion, including for China-founded Shein, which generated an estimated £1.5bn ($2bn) in UK revenue in 2023. With Shein reportedly exploring a London IPO, any potential shift in the UK’s regulatory environment could materially affect its valuation, investor confidence, and growth trajectory.
At the same time, other platforms such as Temu and Cider are rapidly expanding in the UK, drawn by relatively light-touch regulation and a digitally-savvy consumer base.
With increasing focus on the industry’s environmental impact, campaigners are calling for better regulation and more scrutiny of fashion retailers’ conduct. If regulators do clamp down, striking the right balance between protecting the environment while minimising any economic fallout will be a tough challenge.
After all, the Bank of England has already warned that economic growth is slowing and on top of that, the UK is grappling with a lack of investment, an exodus of millionaires, and a poor IPO outlook. Given that ultra-fashion is such a lucrative industry, increased regulation could signal further economic problems, despite its environmental merits.
According to McKinsey & Company’s State of Fashion report, ultra-fast fashion means making and selling new clothes within days by using data to spot trends quickly, flexible factories, and very cheap production.
The UK is the fourth-largest producer of textile waste in Europe, according to the Fashion Waste Index, which was produced by fashion retailer LABFRESH.
The index showed that the UK generates 206,456 tonnes of textile waste each year and that, on average, each Brit discards 3.1 kg annually. Of the 3.1kg that is discarded, 0.3 kg is recycled, 0.2 kg is reused, 0.8 kg is incinerated, and 1.7 kg ends up in landfill.
Across the Channel, France faced a similar issue and has already started to take action. In a landmark move that could reshape global retail, it became the first country to directly crack down on the ultra-fast fashion industry with sweeping environmental reforms.
Passed by the French Senate in June, the legislation introduces a €5 eco-tax per clothing item in 2025. This is set to double to €10 by 2030 and bans advertising for brands that fail to meet sustainability standards.
The new French law also mandates “eco-score” labels to measure garments’ environmental impact and fines influencers who promote disposable fashion. The move marks a direct regulatory challenge to high-turnover, low-cost brands.
Shein generated an estimated £1.5bn in UK revenue in 2023. ·Pablo Cuadra via Getty Images
Emily Carr, policy adviser at Green Alliance, told Yahoo Finance UK: “British people think the government needs to step in to make the fashion industry more sustainable – previous polling for Green Alliance showed that seven in 10 would support environmental impact labelling for clothing.”
France’s policy has already caught the attention of British campaigners and green industry groups calling for stronger enforcement under the UK’s Environment Act and reforms to its Extended Producer Responsibility (EPR) framework.
“The Environment Act 2021 gives the government lots of the powers it would need to catch up. For example, it could use powers in the Act to design an EPR scheme for textiles that penalises low-cost, low-durability products, like the French eco tax aims to do. Through this Act, the government has all the powers it needs, it just needs to show ambition by using them,” said Carr.
These reforms could make producers and platforms financially responsible for the full lifecycle of the products they sell – from design to disposal.
Dr Sarah Gray, lead analyst at Waste and Resources Action Programme (WRAP), a UK-based climate action NGO that works to reduce waste and promote a circular economy, told Yahoo Finance UK: “Referring to last year’s progress report for the UK Textiles Pact, we’re seeing incremental improvements – but rising sales volumes are cancelling out the environmental gains.”
WRAP and members of the UK Textiles Pact are working to define what a successful EPR system would look like. Dr Gray said that while strong models exist in France, the Netherlands, and Australia, the UK still needs clarity on product scope, eco-fee modulation, and how revenue would be collected and distributed.
A circular economy strategy for England is expected this autumn, and with the climate crisis intensifying, calls for legislative urgency are growing louder.
Influencers also play a crucial role in promoting ultra-fast fashion. France’s new law proposes a full ban on advertising and influencer marketing for such brands. If passed, the content would be banned, with violations carrying fines of up to €100,000.
According to WRAP, eco-scores and advertising bans such as those included in France’s new law would be technically feasible within the UK framework, though it would be up to the government to legislate such measures.
In a statement to Yahoo Finance UK, a spokesperson for Shein said: “The proposed bill, as currently defined, does not meet its stated objective of reducing the environmental impact of the textile industry… It inadvertently penalises French consumers, especially in the context of inflation.”
The company defended its approach, pointing to its “demand-driven” model, which it said avoids overproduction.
Shein proposed an alternative: a Sustainable Textile Transformation Roadmap — a framework focused on unsold inventory thresholds, responsible sourcing, and measurable sustainability goals.
If the UK becomes subject to similar regulations as France, ultra-fast fashion brands may face a costly reckoning — reengineering supply chains, scaling back stock keeping units (SKUs), or absorbing eco-tax compliance costs that would squeeze already thin margins.
Ultra-fast fashion may be big business and an important part of the UK’s retail landscape but concerns about its environmental impact are not likely to disappear any time soon. How a potential clampdown on its practices could impact both the industry and the wider UK economy remains to be seen.
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