China's fast-fashion giant Shein files for IPO in US
Chinese fast-fashion giant Shein has confidentially filed for a US initial public offering (IPO), according to Reuters. While the exact size of the offering and the IPO's valuation remain unspecified, the company garnered a valuation exceeding $60 billion back in May. Shein could be the most valuable company founded in China to go public in the US since ride-hailing giant Didi Global's debut in 2021 at a $68 billion valuation.
Underwriters and potential timeline
Goldman Sachs, JPMorgan Chase, and Morgan Stanley are the lead underwriters for the offering. Headquartered in Singapore, Shein is anticipated to potentially go public in 2024. Bloomberg had reported earlier that the company aimed for up to $90 billion in the float.
IPO market challenges and expectations
Shein's US IPO comes amid challenging markets and increased scrutiny from US regulators. The US market has seen four major IPOs lately, with three falling short of investor expectations. Notably, companies like British chipmaker Arm Holdings, grocery delivery app Instacart, luxury sandal maker Birkenstock, and marketing automation firm Klaviyo have all disappointed investors in recent months with underwhelming performances.
Regulatory hurdles and supply chain concerns
It is uncertain if Shein has filed with the China Securities Regulatory Commission (CSRC) for the US IPO. Chinese companies require CSRC clearance before proceeding with offshore offerings. In August, Republican attorney generals from 16 US states requested the Securities and Exchange Commission to audit Shein's supply chain for alleged forced labor use ahead of its potential IPO.
Shein's global expansion and market position
Fast-fashion brands, including Shein, have been surging in the US, attracting customers away from traditional retailers like Gap. Shoppers are seeking more current styles and trendy clothing options. In August, Shein formed a partnership with SPARC Group, a collaboration between Authentic Brands, owner of Forever 21, and Simon Property Group, a mall operator. This move aimed to broaden their market presence and capitalize on the increasing demand for their merchandise.
What is fast-fashion?
Fast-fashion refers to the business model of replicating the latest catwalk trends and high-fashion designs, mass-producing them at a low cost, and offering them to fashion-conscious consumers while demand is at its highest.
