Fast fashion giant SHEIN is eyeing a substantial valuation of US $ 90 billion as it lays the groundwork for its US initial public offering (IPO), far surpassing its recent trade valuations. While the exact timing of the IPO remains uncertain due to market volatility, SHEIN has expressed its intention to secure a valuation between US $ 80 billion and US $ 90 billion.
In private trades, SHEIN’s value had dipped below the US $ 66 billion it obtained during a funding round in May. Recent secondary market transactions valued the company at approximately US $ 50 billion to US $ 60 billion. These fluctuations highlight concerns among investors, including intense competition, allegations of copyright infringement, and potential connections to forced labour, which may complicate SHEIN’s performance in the IPO.
SHEIN, once the world’s third most valuable startup in 2022, with a US $ 100 billion valuation, has seen a decline in line with broader market trends due to an uncertain economic outlook and higher interest rates.
The company’s success in the ultra-fast fashion market has brought increased scrutiny into its supply chain practices, with a member of Congress calling for an investigation into its use of cotton from China’s Xinjiang region. SHEIN has also been criticised for its environmental impact alongside its fast-fashion peers.
The decade-old company faces intense competition from Temu, owned by Chinese e-commerce giant PDD Holdings Inc. However, SHEIN expects its net income to reach US $ 2.5 billion this year despite the intensifying competition.
SHEIN has also been diversifying its product offerings, expanding beyond clothing and accessories by investing in companies like Sparc Group and acquiring the British online brand Missguided.
