Shein aims for $90 billion valuation in US IPO
Shein, the fast-fashion behemoth, is reportedly eyeing a staggering $80-$90 billion valuation for its upcoming US initial public offering (IPO), sources revealed to Bloomberg. This figure surpasses the company's current valuation in private trades, which has dipped below the $66 billion mark it reached during a funding round in May. Market volatility, however, leaves the exact timing of the share sale uncertain.
Private trade valuation and investor concerns
Recent private trades have valued the fashion retail giant between $50-$60 billion, reflecting investor apprehension regarding the company's hurdles. These obstacles range from intensifying competition to allegations of copyright thefts and potential involvement of forced labor. The discrepancy between the actual valuation and the asked valuation in the IPO could hinder Shein's aspirations for a high-profile listing. The final decision on the IPO's valuation and timing is yet to be made.
Scrutiny over supply chain practices and competition
The success of Shein has drawn attention to its supply chain practices, with a congressional member urging an investigation into the company's use of cotton sourced from China's Xinjiang region. If found guilty of violating US laws prohibiting forced labor, Shein's products could face a ban from entering the country. Additionally, the online retailer is contending with fierce competition from Chinese e-commerce giant PDD Holdings Inc.'s Temu, which boasted over double Shein's US sales in September.
Expansion and diversification efforts
Nevertheless, Shein anticipates a net income of $2.5 billion this year. The company has been striving to broaden its product range beyond clothing and accessories under its own brand. In August, Shein acquired approximately one-third of Sparc Group, which owns competitor Forever 21 through a joint venture. As part of this agreement, Forever 21 products will be accessible to Shein's online clientele. In October, Shein further expanded its third-party offerings by purchasing British online brand Missguided from Frasers Group Plc.
