Shein said to face investor pressure to slash valuation to $40 billion for IPO
Sign up now: Get ST's newsletters delivered to your inbox
The Singapore-based fast fashion giant has been valued at as much as US$100 billion in the past.
PHOTO: REUTERS
Follow topic:
LONDON – Fast-fashion retailer Shein is under pressure to cut its valuation to about US$30 billion (S$40 billion), according to people familiar with the matter, having in the past been valued at more than three times that amount.
Shein shareholders are suggesting that an adjustment is needed to help get its potential initial public offering (IPO) in Britain over the line, the people said, asking not to be identified because the talks are private.
Shein has had a bumpy ride in its attempt to go public, with questions raised over its supply-chain operations and labour practices, while uncertainty over global trade relations and political tension are mounting.
The company rerouted its IPO application to London
Founded in China but now based in Singapore, Shein became one of the world’s most valuable start-ups thanks to its high-volume, low-cost fashion. Its investors include IDG Capital, Mubadala Investment, Tiger Global Management and HongShan Capital, formerly known as Sequoia Capital China.
Shein and rival Temu, owned by PDD Holdings, have attracted customers in places such as the United States with cheap products shipped directly from Chinese suppliers. The business model has proved popular as households struggle with the rising cost of living.
They also pose a challenge to the likes of Amazon.com.
But US President Donald Trump’s policies have fuelled uncertainty, including over the potential size and timing of Shein’s IPO. His decision to scrap a so-called de minimis rule removes an exemption on tariffs for parcels carrying goods worth no more than US$800, a blow to Shein’s main business, as well as Temu’s.
Shein executive chairman Donald Tang has sought to reassure investors after Mr Trump’s move that the company will maintain its edge in the US, its biggest market.
“As I am writing this note to you, despite the recent challenges, our growth remains strong, driven by our ability to offer a diverse selection of fashion and lifestyle products at consistently affordable prices,” he told investors in a letter on Feb 17.
Shein is investing in “supply chain advancements to boost efficiency and responsiveness”, as well as better logistics “to ensure faster, more reliable deliveries”, he added.
Shein, which was valued at US$66 billion in a funding round in 2023 and as high as US$100 billion in 2022, confidentially filed papers in June for a London IPO.
Bloomberg reported in January 2024 that investors were trying to sell Shein shares in private market deals that valued the company at as low as US$45 billion, reflecting dwindling enthusiasm. BLOOMBERG, REUTERS
