Fast Fashion. Fossil Fuels. Atacama Desert Clothing Waste Dunes. That Star-Studded Mumbai Wedding.

Fast Fashion. Fossil Fuels. Atacama Desert Clothing Waste Dunes. That Star-Studded Mumbai Wedding.
The Circle of Waste, Plastic, Oil, Exploited Labor, Stolen Designs, CO2 & Billionaires Behind Those Fun Apps and Brands.
 
 
Guess who is the number one exporter of fashion these days? Hint: it’s not France or Italy, the couture designers of the world. It’s the hottest new app, with ads splashed all over Instagram and TikTok: Temu. Temu ranks at the top of downloads in apps for both Android and iPhone. It is the fastest growing fashion brand with a revenue jump of 131% year over year in the most recent quarter. The company is so hot that if it weren’t so problematic in terms of exploitation, questionable labor practices, pollution, toxic waste, intellectual property violations, overproduction, plastic clothing, and being based in China, it might qualify as the hottest company of the year. If you would like a Fast Fashion stock report card, email [email protected]. 
 
China Based
PDD Holdings is the parent company of Temu, symbol: PDD on the NASDAQ Stock Exchange. The company lists itself as a Dublin and Shanghai based company, but it is clearly a Chinese company, with an all-Asian C-Suite. The Arkansas Attorney General refers to the executives and board directors as “former Chinese Communist Party officials.” Temu is being sued and accused by Arkansas for pretending to be an e-commerce platform, while actually operating malware and spyware.

This is key for investors to know because Chinese stocks have been very volatile, and many have seen their share price plummet with little hope of recovery. Fast fashion restrictions are being imposed or lobbied for in France, Ireland (oddly), Australia, the U.K., and the European Union. Former Wall Street darlings like Alibaba are trading at all time lows. China is ranked near the bottom of the Index of Economic Freedom, and is considered repressed by investors. Singapore is at the top, followed by Switzerland, Ireland and Taiwan. (Hong Kong used to be #1.)

As you can see in the chart below, PDD’s share prices are very volatile. Bad news can travel fast, and there are plenty of reasons why Temu might go viral for all the wrong reasons, as SHEIN did before it. (Shein was set for a U.S. IPO, which looks to be abandoned.) If you Google “Worst Fast Fashion Brands” you’ll see Temu at the top of many lists. So be careful taking the bait on the explosive growth, or that the company is based in Ireland. If it follows the trajectory of Alibaba, it could sink back to where it started, at under $20/share.
 

Source: MSN.com. (c) Microsoft 2024. Used with permission.

Cheap, Plastic Clothes, Made in Asia and Sold to U.S. and EU Consumers.
Why are SHEIN and Temu, along with Zara, H&M, and other fast fashion brands, receiving negative publicity these days? If you haven’t already seen the clothing waste dunes in Chile’s Atacama Desert, that’s a Google search that is worth your time.

According to a report from the U.N.’s Economic Commissions for Europe, “Several tens of thousands of tons of textile waste cover around 300 hectares, some of which are burned on-site. Most clothes are made of synthetic fibres, and their incineration releases heavy metals, acid gases, particulates, and dioxins, harming the health of people nearby and damaging the local environment.” Earth.org reports that 92 million tons of waste is dumped annually from the 100 billion garments produced each year.
 
Fast fashion brands are purchasing oil-based yarn (fossil fuels), overproducing cheap, polyester (made from oil) clothes, ripping off designs, selling the exploited goods to U.S., European and other worldwide consumers on their bargain apps, and then dumping whatever doesn’t get sold. Ads bait customers with offers of shoes, dresses, pants and tops at under $15. The questions are, “Are we mindful of the true cost of cheap polyester clothing? Are we aware of which companies and billionaires are getting rich on our fast fashion purchases? Will we rethink our choices, and spread the word?”
 
Asia’s Richest Man: 
Over the past month, my social media has been blowing up with images of Asia’s richest man’s youngest son’s Indian wedding. Makesh Ambani, worth $120.3 billion, is the chairman and managing director of Reliance Industries, an Indian oil/gas/polyester yarn+ conglomerate.
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Why would a polyester yarn manufacturer (what Reliance started out as) expand into owning oil and gas? Because over half of each barrel of oil is used to make plastic, polyester, vinyl, rubber, asphalt and other petroleum-based products that permeate every aspect of our lives. How many of us are aware that we wear shoes and clothes that are basically made of oil? Washing polyester clothing leaches plastic fibers into our water and soil, and back into our bodies. (Please purchase and wear natural fibers, and boycott polyester.)
 
Makesh’s son, Anant Ambani, is in charge of Reliance’s renewable and green energy. Part of the way that company intends to become Net Carbon Zero by 2035 is by “maximizing [the] crude [oil] to chemicals conversion” (source: Reliance website). Crude to chemicals is exactly the way that polyester yarn is made. Reliance is the top producer of polyester yarn in the world (according to their website).
 
When we understand the circular oil/shipping/fiber/sweatshop/nurdle/Atacama waste dunes of polyester it is harder to justify those cheap yoga pants. It’s easier to see the greenwashing in the job description of Anant. Our spending is the catalyst that sparks the cycle, while the 11th richest man in the world – Makesh Ambani – reaps the benefits.
 

Justin Bieber, Katy Perry and Rihanna all performed at various events for the Ambani wedding. Kim Kardashian and Nick Jonas attended some ceremonies. Everyone was dressed to the nines. SKIMS is a fashion brand with a lot of petroleum-based fabrics. It’s likely that a lot of these celebrities took private planes. (It would take most of us 600 years of living to equal the annual CO2 footprint of many of these jet-set celebrities. Click to learn more.)
 
Deckers Outdoor Corp. and Allbirds
More and more fashion designers are raising awareness on why polyester, even recycled, is so harmful to our own health, as well as the planet. Deckers Brands has many natural fiber products, as does Allbirds. Ugg, a Decker’s brand, prides itself on making shoes that are built to last. (It’s hard to imagine a pair of Uggs in the waste piles in Chile.) Clothing companies like MATE and PACT sell organic cotton activewear for affordable prices. Green designers are leaning into cotton, cashmere, wool, silk, hemp, linen, modal and viscose, and eschewing polyester.
 
Buying less and using things longer are key to sustainability, in addition to boycotting polyester. Paying more for something that lasts ten times longer is more affordable in every way imaginable. While Deckers is nowhere near Temu’s explosive revenue growth, at just 21.25%, having a healthy, steady business model built on quality and durability has taken the company’s share price to new heights – as has a new listing on the S&P500 (as of 3.18.2024). Deckers is worth 8 times more today than it was in March 2020. (Be careful buying high, as the P/E is almost 30.)
 
Allbirds gets great reviews from customers. (I love my weather-resistant sneakers.) However, the stock is trading below a dollar. The company has had to close stores and revenue is down -27.64% year over year. FYI: Crocs are made from ethylene-vinyl acetate (EVA), a polymer that comes from crude oil.
 
If you would like a Deckers Outdoor+ stock report card, email [email protected]. 
 
Data Risks of Chinese Apps
I mentioned the Arkansas lawsuit against Temu above, where Arkansas Attorney General Tim Griffin released a statement writing, “Though it is known as an e-commerce platform, Temu is functionally malware and spyware.” Politicians warn us that it is dangerous to give all of our personal information, including our credit card and bank accounts, to Chinese-based companies like TikTok, SHEIN and Temu.
 
Of course, U.S. based companies are mining our data for profit, too. However, we’ve seen the Chinese government crack down on Alibaba and Jack Ma in ways that it’s hard to imagine in the Western World. Ma criticized the Chinese government just days before the Alibaba fintech spinoff Ant Group was set for an IPO. The IPO was canned. Ma ended up losing more than half of his wealth. (He’s still worth $25 billion, according to Forbes.) Ma stepped out of the public arena, and has kept a low profile since then. No matter where we stand on this debate, it’s better if we’re conscious of whom we are giving our personal information to, and what the ramifications of that might be, beyond that cute $10 polyester dress.
 
Intellectual Property Rights 
Etsy designers have sued Shein and complain about Temu for stealing their work. Temu’s spokespersons say they take these allegations seriously, and remove products that violate intellectual property rights. However, designers point out that the designs can then show up on another vendor’s page of the Temu platform. No one is getting paid much to design a $5 t-shirt.
 
Plastic-Free July
July is devoted to plastic-free awareness. How many of us knew that so many of our clothes and shoes are all made from oil (as plastic is)? Are you an influencer? Can you help spread the word? Please be sure to use the hashtag #EarthGratitude. Also, if you haven’t read and reviewed my book, The Power of 8 Billion: It’s Up to Us, please do!
 

Bottom Line
Cheap polyester clothing is harmful all up and down the supply chain, and makes oil, gas and polyester yarn billionaires rich. Recycling isn’t the cure. Refusing is. Be careful jumping into the stock of hot new fast fashion brands. The share prices are volatile, and the business model is on the wrong side of history.
 
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Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The Power of 8 Billion: It's Up to Us and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 5th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is are the most recent releases of these books. Follow her on Instagram. 
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Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

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