Primark and H&M Set to Gain from New Import Charges: A Silver Lining for the Fashion Industry

The recent economic changes in the apparel market may not be all doom and gloom for established retailers like Primark and H&M. In fact, new import charges that increase costs for fast-fashion giant Shein could actually translate into greater opportunities for these value-focused brands.

Shein's Declining Profitability

Shein recently reported a staggering $99 million loss for the first quarter of 2026, a significant drop from the $395 million profit posted a year earlier. This loss is attributed to rising duties and taxes imposed by the US and new regulations in Europe, which collectively increase the overall costs of importing low-value apparel.

Implications for Established Retailers

According to a recent analysis by Citi, these developments may serve as a potential boon for Primark and H&M. As Shein's competitive edge diminishes due to increased expenses and a shrinking customer base, both brands could find themselves in a strengthened position. With Shein's market share in the UK hovering around 1.3%, the lessened competitive pressure could allow Primark and H&M to better protect their sales and margins.

A Call for Faster Action on Import Charges

Retailers in the UK are advocating for even quicker governmental action concerning similar import charges, asserting that the current exemption advantages international online sellers like Shein. The anticipated legislative changes could level the playing field for domestic retailers facing higher costs, further benefiting established players in the market.

The landscape of retail continues to evolve, and while the challenges presented by the fast-fashion segment remain, it is encouraging to see opportunities emerging for traditional value retailers. As we monitor the situation, it will be fascinating to see how Primark and H&M leverage these changes to enhance their market positions.