April 10, 2024

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Indiana’s Top Business School Proudly Partnered With Shein, Then Quietly Cut Ties

As the fashion juggernaut faces new scrutiny from regulators, officials at the Kelley School of Business at Indiana University refuse to explain why it abruptly abandoned a partnership it once touted as a “natural fit.”

By Cyrus Farivar and Iain Martin, Forbes Staff

Illustration by Angelica Alzona for Forbes; Photo by Comstock/Getty Images, stereohype/Getty Images

In March 2022, Indiana University’s Kelley School of Business struck a deal with Shein, the Chinese-born fast fashion giant. Students would be able to learn about company practices and get access to executives while doing research for the company, and Shein would be able to scout talent — similar to the school’s other partnerships with companies like Macy’s and The Home Depot.

The partnership, Shein’s first with an American university, was aptly timed. Indiana was set to be the location of Shein’s first American warehouse, which would open at the end of 2022 with the promise to create 850 new jobs.

But after an effusive press release noted the partnership was a “natural fit” that would highlight “the economic growth Shein is bringing to Indiana,” the university quietly scuttled the deal just months later — and no one knows why. Kelley’s glowing press release was deleted from its website, and the school has never explained what happened.

“I don’t think anybody knows what that deal was,” Mary Embry, a senior lecturer in merchandising, who teaches in Eskenazi School of Art, Architecture and Design, a sister school to Kelley, told Forbes. But, she noted, Shein’s clothing is “not ethical,” and “I think it was very tactical of [Kelley] to let it die.”

Controversy has dogged Shein for years as the company has exploded into a $66 billion behemoth competing against fast-fashion retailers H&M and Zara with ultra-low prices. The company has been beset by accusations of unsustainability and poor labor practices. Greenpeace has slammed Shein’s business model, saying that it “is reliant on wasting Earth’s precious resources and depends on the exploitation of the environment and people.”

In 2022, the company was accused of using cotton that originates from Xinjiang province, where U.S. officials say the Chinese government is perpetrating human rights abuses against Uyghurs. The company also has been sued numerous times over allegedly stealing apparel designs. Last month, a Congressional committee report found that the company relies “heavily” on a tactic that allows it to skirt American tariffs and keep its prices artificially low.

George Vlahakis, the Kelley School’s spokesperson, told Forbes in an emailed statement that the school “launched a fact-based review of the company,” and then “decided to discontinue the relationship.” Vlahakis added that neither he, nor John Talbott, the director of the Center on Education and Research in Retail, and the deal’s former champion, would “have anything further to say about this matter beyond this statement.”

Shein did not respond to some of Forbes’ emailed questions. In a statement sent by Angela Tucciarone, a company spokesperson, the company declined to explain why the deal with Indiana University ended.

“Shein continually reviews all of its active partnerships and this engagement with Indiana University last year provided us with valuable learnings as we continue expanding partnerships with academic institutions,” the company said in the statement.

Shein, however, did pay “a grant to the Indiana University Foundation and funding to support the Kelley School of Business in the research study.” The company declined to specify how much was paid.

The company also told Forbes, as it previously has said, that it has no suppliers in the Xinjiang region and would improve standards at suppliers’ factories. In response to criticisms about sustainability, in 2022 it committed to reducing supply chain emissions 25% by 2030.

“I don’t think anybody knows what that deal was.”

Mary Embry, senior lecturer, Eskenazi School of Art, Architecture and Design

After the Kelley partnership ended in June 2022, Kyle Anderson, a professor from the school, published a 16-page report on the Shein website. The report found that the company would bring a windfall to Whitestown, in Boone County, where its warehouse is located, creating 1,000 new jobs in the first year and bringing in $175 million annually in “gross state product.” Chuck Cornwell, the Shein facility’s general manager, wrote its introduction, expressing gratitude for “Indiana partners.”

Anderson told Forbes he was “not involved with any other aspect of the relationship between Shein and IU,” and had “no insights into the decision to end the relationship.”

Chapin Faye, a spokesperson for advocacy group Shut Down Shein, told Forbes that his group has recently been educating members of Congress on the company’s practices. But he was unaware that the Kelley School had entered into – and then scrapped – a deal with Shein last year. “I bet some of the administrators at the university had no idea what Shein is doing,” Faye said.

As the Chinese company has pushed further into the American market, it has stepped up its charm offensive. Most recently, Shein brought a handful of fashion-related influencers to come to see its facilities in China – and a backlash ensued over a perception that American social media influencers and models were being used to shill for Shein.

In response to the recent China trip, a company statement sent to NBC News said: “We look forward to continuing to provide more transparency around our on-demand business model and operations.”

But Shein continues to be focused on universities: This spring the company announced a program for 12 students to each receive a $40,000 scholarship to the Fashion Institute of Design & Manufacturing in Los Angeles.

“Shein’s prime target market is Gen Z,” Sheng Lu, a professor of fashion and apparel studies at the University of Delaware, who has studied Shein’s practices, told Forbes. “[It] may feel that having a partnership with a university may make them more appealing to their customers.”

Students at Kelley, however, felt differently. Layne Beason, who graduated from the Kelley School in 2020, told Forbes that she was dismayed that the school would even consider entering into a deal with Shein, given its known controversies.

“Throughout my time there we were told many many times that the value of your degree depends on what is happening at the school,” Beason said. “My degree is only as strong as what Kelley is doing right now.”

Just weeks after the deal began to spread throughout the Kelley School and alumni community, Beason was part of a group that began to speak out about the entire premise of a “fast fashion” company working so closely with the school.

“We were taught at IU that #fastfashion can never be sustainable,” Beason wrote on LinkedIn. “Fast Fashion companies either take shortcuts on the quality, which leads to garments ending up in the trash, or they underpay and exploit their workers. Shein is known for doing both.”

Kelley’s student government was also unhappy with the partnership. “Shein’s lack of transparency and refusal to converse with Kelley’s student population is deeply concerning,” Kelley School’s then-student president Chase Wampler and then-executive vice president Ajith Amba wrote in a statement on Instagram. “If Shein is to continue increasing its involvement with Kelley, it must continue its advancements toward sustainability and be more transparent about its practices.”

Wampler told Forbes that while he was glad the partnership was halted, he was frustrated that he didn’t find out about its end until returning to campus in the fall of 2022. “It was a clear misalignment and I was disappointed that they didn’t involve students and stakeholders in the process,” he said.


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