Shein, the fast-fashion powerhouse, has confidentially filed for an initial public offering (IPO) in the United States. This strategic step marks a pivotal moment for the company, which has rapidly ascended to become a dominant player in the global fashion market. Founded in Nanjing, China, in 2008 by entrepreneur Chris Xu, Shein initially operated under the name ZZKKO before rebranding and expanding its reach.
The company, now headquartered in Singapore, has been valued at $66 billion as of its last funding round. However, with the IPO on the horizon, Bloomberg reports suggest that Shein could be targeting a valuation of up to $90 billion, positioning it as one of the most valuable China-founded companies to list in New York. The potential U.S. IPO is slated for some time in 2024, although the exact timeline remains uncertain.
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Shein's decision to file confidentially allows the company to work closely with the U.S. Securities and Exchange Commission (SEC) to fine-tune its offering details before making them public. Once the registration filing is disclosed, this process will enable investors to gain insights into the company's financial health, growth trajectory, and management structure. Shein's rise to prominence has not been without controversy. The company has faced allegations of using forced labor in its supply chain, which has led to investigations by U.S. regulators.
In response, Shein has stated that it has "zero tolerance for forced labor" and is taking steps to address these concerns. The company's CEO, Chris Xu, remains a major stakeholder and continues to run the company, although little is publicly known about him. Despite these challenges, Shein's business model, characterized by its trendy designs, low prices, and direct-to-consumer shipping strategy, has allowed it to carve out a significant market share.
In 2022, Shein reported an estimated $24 billion in revenue, a substantial increase from the previous year. As Shein prepares for its IPO, it has engaged prominent financial institutions such as Goldman Sachs, JPMorgan Chase, and Morgan Stanley as lead underwriters. The move to go public comes when the IPO market shows signs of recovery after underwhelming performances by other companies.
