Shein has hired three US-based financial companies – Goldman Sachs, JPMorgan Chase, and Morgan Stanley – as underwriters for the upcoming IPO.
Famous Chinese online fashion company Shein has filed to go for an IPO in the United States as part of its efforts to expand its footprint in one of the largest apparel markets in the world, Reuters reported Tuesday, citing two people familiar with the matter.
According to the report, the company has confidentially filed with United States regulators to conduct an initial public offering (IPO) sometime next year.
Previous Denial and Current Status
Earlier this year, the company refuted reports claiming it had filed with the Securities and Exchange Commission (SEC) for a US IPO in June. However, individuals familiar with the matter said the fashion retail giant had officially filed a confidentiality notice to go public in 2024.
Although there is no official confirmation regarding the new filing, Shein has hired three US-based financial companies – Goldman Sachs, JPMorgan Chase, and Morgan Stanley – as underwriters for the upcoming IPO.
The 11-year-old online fashion company, founded in China but currently headquartered in Singapore, was recently valued at $66 billion after receiving $2 billion from institutional investors during a funding round conducted in May. The online-only fashion company saw a 25% decline from its previous valuation of $100 billion, which it reached during another fundraising conducted in April last year.
It is estimated that the firm, which has hundreds of millions of customers around the world, would aim to raise an even higher valuation at the IPO next year, making history as one of the biggest Chinese companies to go public in the United States after ride-hailing company Didi Global, which secured $68 million in 2021 during its IPO.
Sources familiar with the matter said the firm is yet to disclose its target valuation for the IPO, but Bloomberg earlier reported that it plans to raise up to $90 billion.
According to a separate financial presentation seen by the Financial Times, the company intends to boost its annual revenue from $22.7 billion it generated in 2022 to $58.5 billion in 2025.
With its affordable clothing, ranging from on-trend $5 skirts to $9 jeans, Shein has disrupted the global clothing industry, emerging as one of the largest fashion companies in the world.
Money.co.uk reported last year that Shein overtook popular US-based fashion companies such as Zara, Nike, and Adidas in the world’s most-Googled clothing brands.
Controversies and Challenges before Shein IPO
Despite its popularity among male and female adults, the company has been surrounded by many controversies over the past years. The fast-fashion company was accused of mistreatment of Uyghurs, a marginalized group in China. The firm also allegedly falsified reports of forced or underpaid labor in its supplier factories, some of which are reportedly located in the Xinjiang Uyghur Autonomous Region of China.
However, Shein rebuffed the allegations, claiming it had no suppliers in the region. Despite the refute, bipartisan lawmakers in the US called on the country’s market regulators, including the SEC last year, to crack down on the company due to the alleged mistreatment of employees and forced labor.
Lawmakers wrote a letter to SEC chair Gary Gensler insisting on probing the firm for potential violations of federal laws before its anticipated IPO in the country.
“While Shein claims its products do not utilize Uyghur forced labor, and it works with third parties to audit its facilities, experts counter that these types of audits are easily manipulated or falsified by state-sponsored pressure,” the lawmakers said in the letter to the SEC.
According to the congressman, some experts opined that “it is appropriate to presuppose that any product made in the XUAR is made with forced labor.”
The company is presently under scrutiny from the recently established House Select Committee on the Chinese Communist Party, with a focus on its connections to Beijing.