Shein Files for US IPO as Chinese-Founded Fashion Giant Seeks to Expand Global Reach
By Jace Dela Cruz
Nov 28, 2023 01:08 AM EST
Nov 28, 2023 01:08 AM EST
Chinese-founded fast-fashion giant Shein has confidentially filed for an initial public offering (IPO) in the United States (US) as part of its strategy to broaden its global presence, according to people familiar with the matter.
CNBC reported that the last recorded valuation for Shein was $66 billion, and the sources told the outlet on Monday that the company could enter the public markets and start trading by 2024. However, the current valuation has reportedly remained a contention among Shein and its advisors.
The confidential filing is a standard procedure that enables companies to engage with the US Securities and Exchange Commission (SEC) and make required adjustments discreetly.
Shein is projected to enhance its documentation and respond to SEC inquiries in the upcoming months. When ready to advance with the IPO, the filing will be disclosed publicly, incorporating any revisions to the paperwork and interactions with the SEC.
Shein has experienced significant growth in recent years, capturing a global audience with its designs, extensive product range, and budget-friendly prices.
Despite its success, the company has encountered challenges, facing allegations of forced labor, violations of labor laws, environmental harm, and plagiarism accusations from independent artists.
The House Select Committee on the Chinese Communist Party is currently investigating Shein. The company's ties to Beijing have attracted scrutiny.
Lawmakers, including 16 Republican attorneys general, have urged the SEC to ensure that Shein eliminates forced labor from its supply chain before proceeding with US trading.
As part of its US outreach, Shein acquired a one-third stake in Sparc Group, a joint venture involving brand management firm Authentic Brands Group and mall owner Simon Property Group. According to CNBC, this move aims to strengthen Shein's standing in the eyes of US regulators.
Additionally, Shein entered a partnership with Forever 21, introducing a co-branded clothing line distributed primarily on its website. The company has been working to reshape its public image through pop-up events, influencer engagements, and collaboration efforts.
However, Shein faces challenges in building trust with US regulators, including the elusive public profile of its CEO, Sky Xu, who rarely gives interviews or public statements about the company.
Despite its efforts to overcome negative perceptions, Shein will need to navigate regulatory scrutiny and address lingering concerns as it progresses toward its anticipated IPO.
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