Primark owner Associated British Foods PLC (LSE:ABF) and H&M could benefit as new import charges increase pressure on Shein and reduce competition at the value end of the clothing market, according to Citi.
Shein recorded a $99 million loss in the first quarter of 2026, compared with a profit of $395 million a year earlier, according to a filing cited by the BBC.
"In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the US market to offset a portion of the increased costs," the online fast-fashion retailer said in the filing.
This follows the US abolishing its 'de minimis' exemption for low-value imports in May last year, making Shein's shipments more expensive.
Citi noted that the change was followed by a decline in weekly active users.
Europe is now moving in the same direction, with a €3 charge introduced on low-value imports at the start of this month, while the UK Treasury is expected to introduce similar legislation by 2028, brought forward from 2029.
British retailers are pushing for even faster action, arguing that the exemption gives overseas online sellers an unfair advantage over domestic businesses that face import duties and other costs.
Citi analyst Monique Pollard said Shein holds around 1.3% of the UK clothing market, based on Worldpanel data.
She described Shein's loss as a "potential positive read-across" for Primark and H&M, as similar legislation in their main markets could reduce competitive pressure from low-cost online rivals and give established value retailers more scope to protect sales and margins.
