News Nov 28, 2023 08:30 AM EST

Shein Files for U.S. IPO As $66 Billion Chinese Fashion Giant Expands Globally

By April Fowell

Shein has quietly registered to go public in the United States as the Chinese-founded fast-fashion giant seeks to broaden its appeal internationally with a much-discussed IPO.

As early as 2024, the retailer, whose most recent valuation was $66 billion, may be prepared to begin trading on public markets, according to individuals with knowledge of the situation on Monday.

Shein Files for U.S. IPO As $66 Billion Chinese Fashion Giant Expands Globally
(Photo : by RICHARD A. BROOKS/AFP via Getty Images)
Shein has quietly registered to go public in the United States as the Chinese-founded fast-fashion giant seeks to broaden its appeal internationally with a much-discussed IPO.

Although the company's current valuation is unknown, those with knowledge of the situation indicated that Shein and the experts it works with had disagreed sharply over it.

Confidential filings are frequent because they let businesses interact with the United States. Securities and Exchange Commission and privately make any required changes to their filings.

Shein is expected to revise its documentation and respond to a litany of inquiries from the government during the course of the ensuing months.

When the business is prepared to proceed with its IPO, the filing will be made available to the public. At that time, the correspondence with the SEC and any modifications to its documentation will also be made public.

Over the past several years, Shein has had a meteoric surge in popularity thanks to its cutting-edge designs, vast selection, and incredibly low costs, which have won over customers all over the world.

Challenges and Controversies

However, Shein has encountered several difficulties along the road, including allegations that it has violated labor regulations, harmed the environment, used forced labor in its supply chain, and stolen ideas from independent artists.

The corporation has come under fire for its connections to Beijing and is presently the subject of an inquiry by the recently established House Select Committee on the Chinese Communist Party.

Before Shein is permitted to begin trading in the United States, a number of politicians, including sixteen Republican attorneys general, have urged the SEC to make sure the company isn't utilizing forced labor in its supply chain.

The company's recently appointed group vice chair and former CEO of SoftBank, Marcelo Claure, told CNBC in an interview in October that Shein is working with lawmakers and making time to meet with them to go over the business.

"There is no such thing as forced labor," he declared, referring to the Shein factories he had visited. However, the business has consistently said that it is taking action to address the issue and that forced labor has been discovered in its supply chain.

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Shein's Public Image Makeover and Strategic Alliances

Shein remained mostly hidden as it expanded from a small, unknown Chinese store to a massive, international corporation with its headquarters located in Singapore. It said and did relatively little in public until this year, when it started to make more of an effort to appear as though it was getting ready for a U.S. IPO.

Earlier this year, Shein appointed veteran Bear Stearns investment banker Donald Tang as its executive chair and public face, with Chinese CEO Sky Xu continuing to lead the company.

It has thrown a number of well-publicized pop-up events, dispatched influencers to visit its factories in China as part of a PR effort that was met with mixed reviews, and courted the business press with extravagant parties that showcased its independent designers and other firm allies.

Shein has put a lot of effort into dispelling the numerous unfavorable rumors that have come to characterize the business, and it has made its leadership accessible for interviews in an effort to alter the perception.

It recently bought around one-third of Sparc Group, a joint venture including mall owner Simon Property Group and brand management company Authentic Brands Group. By doing this, it gained a strong ally in the United States that may help the business gain legitimacy with American regulators.

As part of the agreement, Shein and its erstwhile competitor, Forever 21, will launch a co-branded apparel line, with Shein designing, producing, and selling the items mostly online. Pop-up events have been held by Shein within Forever 21's retail locations.

Shein still has to put in more effort before US regulators would be willing to trust it. Beyond all of its problems, the CEO of the corporation is still a shadowy character who never speaks in public or gives interviews. This is a significant divergence from other publicly listed American companies, which routinely provide access to their CEOs. Regarding Xu's citizenship, the business withheld information from CNBC in October.

The business has enlisted Goldman Sachs, JPMorgan, together with Morgan Stanley to serve as the offering's primary underwriters, the sources claimed.

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