Fast fashion giant Shein has confidentially filed for an initial public offering (IPO) in the U.S., the latest sign of its ambitions to expand its global reach.
The company’s effort to go public comes at a time when the U.S. stock market has seen a series of tepid IPO debuts amidst continued market volatility and high-interest rates.
While the company’s current worth remains unclear, it was reportedly targeting a valuation of $90 billion in its IPO float, according to sources close to the matter. In May 2023, the company was valued at $66 billion, about a third lower than its 2022 valuation.
“It doesn’t strike me as the most opportune time for Shein to come public, but if they need capital, the markets are open … and investor sentiment has been more positive than it was a few weeks ago,” Jason Benowitz, senior portfolio manager at CI Roosevelt told Reuters.
“When investors can review the financials, I would expect to see pretty strong growth historically … the key question will be if they can kind of maintain the pace or to continue to gain market share going forward,” he said.
The company’s decision to proceed with a confidential IPO will allow it to work directly with the U.S. Securities and Exchange Commission (SEC) to make any needed adjustments to its filing before making it public. Still, the company faces several challenges, with the House Select Committee on the Chinese Communist Party reportedly investigating its ties to Beijing and numerous lawmakers calling on the SEC to ensure the company is not relying on forced labor before it is allowed to trade on the U.S. stock exchange. It is also facing headwinds for its poor environmental record and for actively infringing copyrights of independent artists and designers.
That said, the Singapore-based company has been trying to clean up its image and correct the narrative by making its senior leadership available for interviews. It also recently acquired a third of Sparc Group, which is jointly owned by Authentic Brands Group and Simon Property Group, the largest mall owner in the U.S. — an effort that is likely aimed at making its U.S. IPO ambitions more palatable to U.S. regulators.
The company has also been partnering with other retailers, including Forever 21, to launch co-branded clothing lines made, distributed, and sold directly by Shein.