Shein IPO: Fast-fashion retailer ready to be listed in New York can create stir around China roots
Shein has a lot of work to do to convince skeptics that the runway is clear for it to launch an initial public offering next year. The Singapore-headquartered company filed confidentially for a listing in New York, a person familiar with the matter has said, weeks after Bloomberg News reported that it could seek a valuation of as much as $90 billion in a first-time share sale.
If it sold a 10% stake, raising about $9 billion at that valuation, it would be the fifth largest consumer company IPO of all time, just behind Porsche AG’s $9.1 billion 2021 listing, Bloomberg calculations show. To achieve that milestone, Shein will have to do a historic job of persuading skeptical investors, politicians and regulators that the controversies surrounding it aren’t an obstacle to its growth.
The company faces issues including allegations that its products contain cotton from a Chinese region accused of making the material with forced labor, regulatory concern about Chinese firms listing in the US and a bruising legal battle with rival PDD Holdings Inc.’s Temu. Investors will likely question how much of management’s time will be taken up with challenges that aren’t directly related to maintaining the app’s dominance, built on selling clothes for as little as $2.
“One of the biggest disadvantages of an IPO is disclosure and publicity," David J. Kaufman, co-chair of Thompson Coburn LLP’s corporate and securities practice group, told Bloomberg News.
“There’s probably going be a big lobbying effort about why they’re not using forced labor and where they source their cotton, and how all that is changing, with codes of conduct and inspection programs," Kaufman said. “The larger names will be able to come up with ways to accommodate those
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