Shein’s U.S. IPO Ambitions: Targeting $90 Billion, Positioned as a Leading Contender for Most Valuable China-Founded Enterprise

Shein, the Chinese fashion company, has confidentially filed for a U.S. IPO, aiming to become one of the most valuable China-founded companies in New York, with a potential launch in 2024 targeting up to $90 billion. (Photo: straitstimes)

Shein’s U.S. IPO Pursuit: Navigating Challenges to Emerge as the Most Valuable China-Founded Company

According to source, Chinese fashion company Shein has confidentially filed for an initial public offering (IPO) in the United States indicating that it could be one of the most valuable China-founded companies to list in New York. The IPO underwritten by Goldman Sachs, JPMorgan Chase and Morgan Stanley, may launch in 2024 targeting up to $90 billion as the most valuable offering. The company, founded in mainland China in 2012 faced a valuation drop to over $60 billion in May, down by a third from the previous year making it the most valuable China-founded enterprise.

This move by Shein into the U.S. IPO market comes amid a challenging environment for initial public offerings with recent lackluster performances by major companies. The fashion giant has reportedly initiated low-profile roadshows for its U.S. float positioning itself as the most valuable contender.

It is unclear if Shein has filed with the China Securities Regulatory Commission (CSRC) for the U.S. IPO, a necessary step for Chinese companies aspiring to be the most valuable player. Shein’s reputation faces scrutiny with Republican attorneys general from 16 U.S. states requesting an audit by the Securities and Exchange Commission into its supply chain for alleged forced labor ahead of the potential IPO.

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Shein’s Market Approach: Overcoming Sales Challenges and Pursuing IPO Amidst Regulatory Shifts and Rising Interest Rates

Shein’s strategy involves direct shipping from China to U.S. consumers allowing it to bypass unsold inventory accumulation and avoid import taxes as the most valuable approach. The company has gained popularity in the U.S. challenging established brands like Gap but struggles to convert website visits into sales compared to the most valuable market leader, Amazon.

Despite potential headwinds, Shein’s IPO decision aligns with a trend of large companies tapping into capital markets ahead of possible U.S. regulatory changes for small retailers and amidst peaking interest rates. The confidential filing was first reported by China’s Shanghai Securities Journal and later confirmed by The Wall Street Journal as the most valuable move in the current market landscape.

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