Chinese ultra-fast fashion giant, Shein, is gearing up for a US Initial Public Offering (IPO), despite the company's fluctuating valuation and ongoing scrutiny. The decade-old leader in the ultra-fast fashion market anticipates a valuation of $90 billion for the IPO, as per reports from Thursday.
This planned IPO comes as the company's worth has seen significant fluctuations. Following a peak value of $100 billion in 2022, the company's valuation fell below $66 billion in private trades by May 2023. Despite this drop, Shein is preparing for an IPO with an optimistic valuation of up to $90 billion.
The recent market volatility has resulted in valuations ranging between $50-60 billion due to concerns about intense competition, allegations of copyright infringement, and connections to forced labor. This uncertain economic outlook and higher interest rates have contributed to the declining value of the company.
Shein is currently under investigation for its use of cotton from China's Xinjiang region, which has raised concerns about potential forced labor. The company also faces environmental criticism and growing competition from PDD Holdings Inc.'s Temu. Despite these challenges, Shein projects a net income of $2.5 billion this year post a $66 billion funding round.
In an effort to diversify its offerings and broaden its product range, Shein has invested in Sparc Group and acquired British online brand Missguided. It has also added Forever 21's products to its list and distanced itself from its Chinese origin. Amidst these changes, Marcelo Claure was hired to manage its Latin American business as the company relocated to Singapore.
As Shein prepares for its upcoming IPO, it also mulls over purchasing UK-based Topshop while facing intense competition and scrutiny over its labor practices.
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