UPDATE 2-Shein to invest nearly $150 mln in Brazilian garment makers

(Adds details about agreement with Brazilian company)

SAO PAULO, April 20 (Reuters) – Chinese online fast-fashion retailer Shein said on Thursday it will invest 750 million reais ($148.9 million) in Brazil in coming years to establish a network with thousands of textile manufacturers in the country.

The company, which also announced a marketplace for products and sellers in Brazil, said it intends to partner with 2,000 manufacturers in the country, which should generate the creation of 100,000 jobs over the next three years.

Some 85% of sales made in Brazil should be sourced from local manufacturers and sellers by the end of 2026, it added.

“We have seen great success in Brazil since our launch in 2020, and with growing consumer demand, we saw the opportunity to further localize our supply chain,” Shein Latin America Chair Marcelo Claure said in a statement.

Earlier on Thursday, Brazilian Finance Minister Fernando Haddad had said that Shein was planning to localize part of its Brazilian sales by implementing local production.

According to the company, the investment will be used to provide technology and training to domestic manufacturers so that they can upgrade their operations to match Shein’s on-demand model.

This strategy should allow local producers to better manage the company’s orders, reduce waste and excess inventory, Shein said.

Later on Thursday, textile producer Coteminas, controlled by Brazilian textile multinational Springs Global, signed a memorandum of understanding with Shein for a “joint effort for 2,000 of its garment manufacturer clients to become Shein suppliers for the domestic market and Latin America.”

The agreement also involves working capital funding for the Brazilian firm and export contracts of household products, Coteminas said in a securities filing.

SHEIN, founded by Chinese entrepreneur Chris Xu, has grown into one of the world’s largest online fashion marketplaces since its 2008 launch in Nanjing.

In Mexico, it faced concerns last year over its use of indigenous designs in a top, which prompted it to remove the product.

$1 = 5.0387 reais Reporting by Andre Romani; Writing by Peter Frontini; Editing by Chris Reese, Sarah Morland and Sandra Maler