Chinese Fashion Giant Shein Secretly Applies to List in the United States
In a stealth move, Chinese fashion company Shein has applied to list in the United States, according to a report from Reuters. If successful, Shein’s listing may be one of the most valuable Chinese-founded companies to list on the New York Stock Exchange, but it will pose a significant test to investors’ appetite.
Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley have been hired as lead underwriters for Shein’s initial public offering (IPO). The Singapore-based company is expected to launch the new offering sometime in 2024, according to sources familiar with the matter. The deal size and IPO valuation have not yet been determined, with Bloomberg reporting earlier this month that the company was targeting a $90 billion valuation for the issuance.
Shein, which was founded in mainland China in 2012, was valued at more than $60 billion in a May round of funding. However, this valuation was down a third from the previous year’s funding round. If successful, Shein’s listing would surpass Didi Chuxing as the Chinese company with the highest market value listed in the United States.
The decision to list in the United States comes at a time when the IPO market is struggling to rebound after a series of lackluster stock market listings. Several recent large IPOs, including those of German sandal maker Birkenstock and grocery delivery app Instacart, have disappointed investors.
It is reported that Shein has begun a low-key roadshow in the United States, although it remains unclear whether the company has submitted an application for an IPO to the China Securities Regulatory Commission.
Despite its popularity and disruption in the retail space, Shein has faced scrutiny, particularly in the United States. Republican attorneys general from 16 states have requested an investigation into the company’s alleged use of forced labor in its supply chain ahead of its potential IPO.
Known for its affordable fast-fashion items, most of Shein’s products are flown directly from China to individual shoppers, utilizing a drop-shipping strategy to avoid unsold inventory and import taxes.
The potential listing of Shein in the United States is a development that will be closely monitored by investors and industry observers alike. If successful, it could further establish Shein as a major player in the global fashion industry.