Shein, a fast-fashion company, has confidentially filed to go public in the United States, positioning itself to become one of the most valuable China-founded companies in the U.S. Shein’s IPO is set to be offered by Goldman Sachs, JPMorgan Chase, and Morgan Stanley, with a potential launch date in 2024. Currently, the company has not yet determined the size of its offering or the valuation it will seek when its IPO takes place. While initially aiming for a $90 billion valuation during its IPO, Shein’s worth was previously valued at over $60 billion in May of this year.
The U.S.-based IPO comes in the midst of challenging markets and heightened scrutiny from the United States. Despite this, Shein is poised to enter the forthcoming IPO market. While the IPO landscape has experienced uninspiring debuts recently, Shein, being a company with robust financials, aims to take advantage of the current market conditions to capitalize on strong past growth and maintain future gains.
Thus far, U.S. IPOs have only raised about $23.64 billion this year, compared to the peak of $300 billion the market witnessed in 2021. Despite the market’s challenging conditions, this could be an opportunistic time for Shein to go public. A big reason behind this optimism is Shein’s self-sustained supply chain strategy that helped the firm avoid unsold inventory, take advantage of customs provisions, and reach its peak of success.
Surprising to some, but not all, Shein and Temu.com have not been able to direct shopper visits into sales and they still have a long way to go to reach Amazon’s level of shopper engagement. This turn of events may very well push Shein to raise capital from the markets during a prime window of opportunity.
As the entire process of filing for the IPO gets underway, and with rumors already circulating about the company working with at least three investment banks for the potential offering, it is essential for Shein to carefully navigate the various regulatory aspects of the IPO process. With the current geopolitical climate heightening scrutiny on supply chains and forced labor, Shein faces challenges that require its utmost attention as it prepares for its debut in the public markets.