Shein Targets High IPO Valuation

Shein Targets High IPO Valuation

THE WHAT?  Shein, the online fast fashion retailer, is aiming for a valuation of US$80 to US$90 billion for its potential U.S. initial public offering (IPO). However, in recent private trades, the company’s valuation has fallen to around US$50 to US$60 billion, lower than its US$66 billion valuation in a funding round in May 2023. The exact timing of the IPO is still uncertain 

THE DETAILS   This drop in valuation highlights issues Shein faces, including intense competition, allegations of copyright infringement, and concerns over the use of forced labor. Despite these challenges, Shein, which became popular for selling inexpensive fashion items and grew significantly during the Covid pandemic, is still aiming for a substantial increase in net income. The company is also expanding its product range and has made acquisitions, such as a stake in Sparc Group, the owner of Forever 21, and the purchase of Missguided.due to market volatility.

THE WHY? Shein’s push for a high IPO valuation amidst a drop in private market value and ongoing legal and ethical challenges reflects its aggressive growth strategy in the fast-fashion sector. The company is trying to maintain its momentum and expand its market presence despite facing increased scrutiny over its business practices and the broader economic uncertainties impacting investor sentiment towards startups.