Two models are competing in fast fashion. One is the app-based platform. Shein and Temu ship millions of products from Chinese suppliers, launch thousands of new styles a day and sell almost entirely online. The other is the store-based high-street chain. Zara and H&M have spent decades building store networks, logistics systems and brand recognition. Between 2025 and 2026, regulators on both sides of the Atlantic changed the rules for the first model. The second model began moving upmarket.
This report compares both, along with the premium high-street brands in between, such as Mango, Uniqlo and Arket. It covers the numbers, the regulation, the stores and the strategies. Each section is built to be skimmed.
The numbers at a glance
- €39.9 billion: Inditex’s sales in fiscal 2025, with a record €6.22 billion net profit (FashionNetwork).
- $41.8 billion: Shein’s 2025 revenue. Profit fell to $2.1 billion from $3.4 billion a year earlier (Caixin, citing its prospectus).
- 1.1%: Shein’s revenue growth in the first quarter of 2026, down from 41.1% in an earlier year.
- 4,700: the average number of new styles Shein launched each day in early 2026.
- +23%: H&M’s third-quarter 2026 operating profit growth, on roughly flat sales (RetailDetail).
- +13%: Mango’s sales growth in 2025, to a record €3.77 billion (FashionUnited).
- €3: the new EU customs duty on parcels worth under €150, in force since July 1, 2026.
- €200 million: the European Commission’s fine on Temu under the Digital Services Act in May 2026.
Two very different businesses
People often group Shein, Temu, Zara and H&M together as “fast fashion.” As businesses, they have little in common.
| Shein / Temu | Zara (Inditex) | H&M | |
|---|---|---|---|
| Where it sells | Apps and websites | Stores and online, with online at about a quarter of group sales | Stores and online |
| Product range | Shein: over 2 million styles. Temu: a general marketplace. | Edited, trend-led collections | Broad ranges with designer collaborations |
| New products | Shein: about 4,700 a day (early 2026) | Restocked frequently in small batches | Seasonal drops plus collaborations |
| Logistics | Shipped from suppliers to customers, now moving to local warehouses | Central logistics hubs in Spain | Global distribution centres |
| Price position | Lowest | Mid-market, moving up | Value to mid-market, moving up |
| Main pressure | Regulation, tariffs, parcel duties | Keeping growth going at a very large size | Weak sales growth |
The platforms’ advantage was built on cheap international shipping and, in the US, on duty-free entry for parcels under $800 (the “de minimis” rule). The high-street chains rely on bulk imports, physical stores and brand loyalty. When governments targeted small parcels, only one of the two models was directly affected.
The scoreboard
| Company | Latest full year | Latest period | Direction |
|---|---|---|---|
| Inditex (Zara) | FY2025: €39.86bn sales (+3.2%; +7% at constant currency), €6.22bn net profit | H1 2026: €19.76bn sales (+7.6%), €2.98bn net profit (+6.8%) | Steady growth, record profit |
| Shein | 2025: $41.8bn revenue, $2.1bn profit | Q1 2026: +1.1% revenue, $99m loss | Growth almost stopped |
| H&M | n/a | Q3 2026: SEK 57.19bn sales (+1% in local currencies), operating profit SEK 6.04bn (+23%) | Profit recovering, sales flat |
| Fast Retailing (Uniqlo) | FY2026: ¥3.96tn revenue (+16.6%), ¥743.1bn operating profit (+31.7%) | Uniqlo International revenue +26.2% | Strong growth |
| Mango | 2025: €3.77bn sales (+13%), €242m net profit (+11%) | n/a | Record year |
| Primark | FY2024/25: nearly £10bn sales, more than £1bn profit | US sales +23% in H2 2024/25 | Expanding in the US |
Figures from company results as reported by FashionNetwork, Modaes, RetailDetail, Caixin, FashionUnited and Reuters via the Irish Examiner. Fiscal years differ by company. Shein’s profit measure is as reported by Caixin.
Shein: still huge, barely growing
Shein was founded in China in 2009 and is now headquartered in Singapore. Its prospectus shows how large it has become. Revenue rose from $32.1 billion in 2023 to $41.8 billion in 2025, Caixin reported. Over the same period, growth slowed and profit fell, from $3.4 billion in 2024 to $2.1 billion in 2025. In the first quarter of 2026, revenue grew 1.1% and the company reported a $99 million loss. Caixin said valuation-related losses on preferred shares contributed to that loss.
Europe is now Shein’s largest region, at 35.4% of 2025 revenue. The US accounted for 24.1%. The prospectus said the end of US de minimis in May 2025 hurt sales and growth. It also warned that Europe’s removal of its own exemption, effective July 2026, could have a material negative impact.
The IPO took four years
| Date | Milestone |
|---|---|
| February 2022 | Private valuation peaks at $98.2 billion |
| 2023 | Planned US listing stalls |
| April 2023 | Valued at $64 billion |
| 2025 | Planned London listing stalls |
| July 10, 2026 | China’s securities regulator accepts the overseas listing plan |
| September 1, 2026 | Shares debut in Hong Kong at HK$48.56 |
On its first day of trading, September 1, 2026, Shein’s shares fell as much as 10% to HK$43.72 before closing at HK$48.50, almost exactly the offer price, Bloomberg reported. Bloomberg said the IPO valued the company at a fraction of its earlier worth. Before pricing, Reuters, citing sources, put the valuation at about $26.5 billion, roughly 70% below the 2022 peak. Founder Xu Yangtian controls about 33% of the company.
Shein opens its first permanent store
On November 5, 2025, Shein opened its first permanent physical store anywhere in the world. It is on the sixth floor of BHV Marais, a department store opposite Paris City Hall, FashionUnited reported. Customers needed tickets to enter, and police secured the area. The children’s rights group Mouv’enfants protested outside. Paris City Council declared itself “at war” with Shein. The opening came shortly after a judicial investigation was launched into child-like sex dolls sold on the platform. The brand agnès b. left BHV the day before the opening in protest, and Le Slip Français had already left after disputes with the store’s owner, SGM.
For a business built entirely on apps, the BHV store was a deliberate move into physical retail. The response showed the reputational risk that came with it.
Temu had to change its US model
Temu, owned by PDD Holdings, changed its US business faster than Shein did. When US de minimis ended for Chinese goods on May 2, 2025, Temu’s US site switched to listing only “local” products held in US warehouses. It stopped shipping Chinese-made goods directly to US customers, CBS News reported. It began recruiting US sellers. Temu also cut its US advertising sharply. Its ad spending fell 90% in the second quarter of 2025 and 70% in the third, according to Reuters.
Temu also ran into trouble in Europe. On May 28, 2026, the European Commission fined it €200 million for breaching the Digital Services Act, Eunews reported. The Commission found that Temu had not adequately assessed the risk of illegal products on its platform. Its examples included chargers that could catch fire and toys with chemicals above legal limits. In October 2026, Euronews reported that the EU had accepted Temu’s action plan.
Regulators started cracking down
| Date | Where | What happened |
|---|---|---|
| May 2, 2025 | US | De minimis ends for China and Hong Kong |
| June 2025 | France | Shein fined €22.5 million over returns, product disclosures and order confirmations |
| July 2025 | France | Shein fined €40 million over misleading discounts and unsupported environmental claims |
| August 29, 2025 | US | De minimis ends for all countries |
| November 5, 2025 | France | Shein’s BHV store opens amid protests and a judicial investigation |
| May 28, 2026 | EU | Temu fined €200 million under the Digital Services Act |
| June 2026 | France | Parliament passes the anti-ultra-fast-fashion law |
| July 1, 2026 | EU | €3 customs duty on parcels under €150 takes effect |
| January 2027 | France | Advertising ban on ultra-fast-fashion platforms due to start |
France’s anti-fast-fashion law
France’s law passed its final vote in the Senate in June 2026, FashionUnited reported. It was narrowed during debate. The original bill covered the whole fast-fashion industry. The final version targets “ultra-express” platforms, mainly Shein, Temu and AliExpress, and leaves out French and European chains. Its main provisions are:
- A ban on advertising by these platforms from the start of the new year.
- A ban on influencers promoting them, with fines for breaches.
- An environmental charge per product that rises over time, linked to environmental standards.
- Required messages encouraging repair, reuse and buying less.
The criteria for deciding which platforms qualify have not yet been set. More than 885,000 tonnes of clothing, household linen and shoes were put on the French market in 2024.
Europe’s €3 parcel duty
In December 2025, the European Council agreed a flat €3 customs duty on small parcels worth under €150, starting July 1, 2026, Ecotextile News reported. Until then those parcels entered the EU free of customs duty. The Council cited unfair competition with EU sellers, risks to consumer safety, fraud and environmental harm. It described the measure as temporary.
For the US side of this story, including tariffs, de minimis and refunds, see our report Are Tariffs Breaking Fashion?
Zara is playing a different game
Inditex is the largest fashion retailer in the world, and it does not compete with Shein on price. In fiscal 2025 the group reported sales of €39.86 billion and record net profit of €6.22 billion. Its gross margin was 58.3%, FashionNetwork reported. Growth picked up in the first half of 2026. Sales rose 7.6% to €19.76 billion and the gross margin improved to 58.7%. Sales at constant currency rose 9% between August 1 and September 7, according to Modaes.
Fewer stores, more space
| Inditex metric | Figure |
|---|---|
| Stores, end of July 2026 | 5,444 (down from 5,528 a year earlier) |
| Store count in FY2025 | 6% fewer stores, 6% more selling space |
| Online sales, FY2025 | €10.66 billion (+4.8%) |
| Markets | 214 |
| Extra logistics investment | €900 million a year in 2024 and 2025 |
| Ordinary investment plan, 2026 | €2.3 billion |
| Zara, Zara Home and Lefties, FY2025 | €28.05 billion (+almost 1%) |
| Fastest-growing chains | Oysho +15.5%, Stradivarius +12.7%, Bershka +12.2% |
The strategy shows in these figures. Zara is closing smaller stores and opening larger flagships. It is investing in logistics so that its stores and online orders draw on the same stock. Europe, including Spain, accounted for 67.2% of fiscal 2025 sales. The Americas accounted for 17.8% and Asia for 15%.
Zara signs John Galliano
Zara’s clearest move upmarket came on March 17, 2026. It announced a two-year creative partnership with John Galliano, the former creative director of Dior and Maison Margiela, FashionUnited reported. Galliano will take garments from Zara’s past seasons apart and rebuild them as new seasonal collections, using a process Zara describes as couture-style. FashionUnited Spain reported that the first collection launched on October 1, 2026.
The Galliano deal follows earlier Zara work with designer Stefano Pilati, model Kate Moss, photographer Steven Meisel and designer Samuel Ross, Wallpaper reported. Zara still sells low-priced basics, but it now also commissions designer collections. Within Inditex, the low-price end is covered by other chains, including Lefties.
H&M is moving upmarket
H&M has struggled more than Inditex. In January 2025, chief executive Daniel Ervér told Reuters that H&M could not compete on price alone and had to “raise the bar.” Shein had undercut both H&M and Zara on dresses, tops and jeans, and H&M was trying to win back market share from Zara.
| Move | What H&M did |
|---|---|
| Designer collaborations | Glenn Martens, Rotate and a Charli XCX capsule, marking 20 years of designer collaborations |
| Product | Focus on quality and trends. The CFO said supply-chain changes could cut idea-to-store time by up to 50%. |
| Stores | Fewer stores overall, with refurbished flagships in key cities |
| Premium brands | Arket expanding into Austria, Norway, Greece and Ireland, with cafés in stores |
| Marketing | Higher spending on influencers and pop-star partnerships |
| Simplifying the group | Sold the outlet business Afound and gave creative teams more autonomy |
Sources: Reuters via Yahoo Finance (January 2025); nss magazine (December 2024).
The latest results show profit improving faster than sales. In the third quarter of 2026, net sales were SEK 57.19 billion. That was roughly flat in Swedish kronor and up 1% in local currencies. Operating profit rose 23% to SEK 6.04 billion, ahead of expectations, RetailDetail reported. Ervér credited cost savings and more efficient sourcing, and said sales were the main area to improve.
The brands in the middle
Between the ultra-cheap platforms and luxury, there is a group of brands that sell to a broad market at higher prices than fast fashion, with more emphasis on design and quality. The industry sometimes calls this the “premium high street.” Several of these brands posted strong results in 2025 and 2026.
| Brand | Positioning | Latest signal |
|---|---|---|
| Mango | Spanish, design-led, upper high street | Record 2025: €3.77bn sales (+13%), online about one-third of sales |
| Uniqlo | Japanese, quality basics and technical fabrics | Uniqlo International revenue +26.2% in FY2026 |
| COS and Arket | H&M Group’s premium brands | Arket expanding across Europe |
| Massimo Dutti | Inditex’s premium brand | €2.02bn FY2025 sales (+3%) |
| Aldo | Canadian, accessible-premium footwear and accessories | Sells widely through its own stores and through partners in international markets |
Mango’s record run
Mango reported another record year in 2025. Sales rose 13% to €3.77 billion, EBITDA reached €722 million and net profit rose 11% to €242 million, FashionUnited reported. It opened more than 260 points of sale, refurbished 86 and invested a record €225 million. Online now makes up nearly a third of sales. Spain, France, Türkiye, Germany and the US account for 78% of revenue. Chief executive Toni Ruiz said the company had turned a complex year into an extraordinary one.
Uniqlo grows on basics
Uniqlo does not follow fast trends. It sells long-lasting basics and technical fabrics, and that is working. In the year to August 31, 2026, its parent Fast Retailing grew revenue 16.6% to ¥3.96 trillion and operating profit 31.7% to ¥743.1 billion, FashionUnited reported. Uniqlo International grew revenue 26.2% and operating profit 44.9%. Both North America and Europe posted double-digit gains.
Primark is betting on US stores
Primark sells at prices close to Shein’s but only through stores, and it imports in bulk rather than shipping individual parcels. In October 2025, Reuters reported that it had 33 US stores and planned to reach 60 by September 2026. US sales rose 23% in the second half of its financial year. Reuters reported that Shein and Temu’s US price increases after the end of de minimis had helped store-based retailers like Primark.
Online vs offline
| Player | Online | Stores | Recent direction |
|---|---|---|---|
| Shein | Almost all sales | BHV Paris (first permanent store, November 2025) | Adding stores |
| Temu | All sales | None | Local warehouses and local sellers |
| Inditex | €10.66bn in FY2025 | 5,444 stores (July 2026) | Fewer, larger stores |
| H&M | A significant share | Network shrinking | Refurbishing flagships |
| Mango | About a third of sales | 260+ openings in 2025 | Expanding in both channels |
| Primark | Website without online sales in most markets | About 475 stores (2025) | US store expansion |
The online-only platforms are opening stores and warehouses in their customers’ markets. The store-based chains are investing in online sales and logistics. Both groups are moving toward a mix of the two.
Where the shoppers are
| Region | Inditex share (FY2025) | Shein share (2025) | What’s changing |
|---|---|---|---|
| Europe | 67.2% (including Spain at 15.9%) | 35.4% | New parcel duty, France’s law, DSA enforcement |
| Americas / US | 17.8% (Americas) | 24.1% (US) | End of de minimis and tariffs |
| Asia and rest of world | 15% | Rest of revenue | Uniqlo strong, luxury weak in China |
Europe matters most to both groups. That makes the July 2026 parcel duty and France’s advertising ban important for Shein’s next stage. For Inditex, the Americas share fell slightly in fiscal 2025, from 18.6% to 17.8%. For how weak Chinese demand affected the luxury end of the market, see our report on China’s luxury slowdown.
So, is fast fashion in trouble?
For the store-based chains, the figures do not suggest a crisis. Inditex reported a record profit. Uniqlo, Mango and Primark are growing. H&M’s profit is recovering. The model under the most pressure is the ultra-cheap, parcel-based one. Shein’s growth has nearly stopped, its listing valued it well below its peak and its two largest markets have both added rules aimed at its business model. Temu had to rebuild its US operations.
What to watch
- Shein’s first results as a listed company. They will show the first full impact of the EU parcel duty.
- France’s advertising ban. It is due to start at the beginning of 2027, and the criteria for which platforms qualify are still being set.
- Sales of the Galliano collection. They will indicate whether Zara’s customers will pay for designer collections.
- H&M’s sales growth. Higher profit from cost cuts will need to be followed by sales growth.
- Resale. Secondhand platforms are competing for the same shoppers. See our report on the resale boom.
Sources: FashionNetwork (Inditex FY2025); Modaes (Inditex H1 2026); Caixin (Shein prospectus); Bloomberg (Shein debut); Reuters via NST (Shein valuation); FashionUnited (Shein BHV); CBS News (Temu); Eunews (Temu fine); Euronews (Temu action plan); FashionUnited (France law); Ecotextile News (EU parcel duty); FashionUnited (Zara x Galliano); FashionUnited Spain; Wallpaper; RetailDetail (H&M Q3); Reuters via Yahoo Finance (H&M); nss magazine (H&M); FashionUnited (Mango); FashionUnited (Fast Retailing); Reuters via Irish Examiner (Primark).
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