Chinese fast-fashion retailer Shein makes confidential filing for US IPO

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Shein, the Chinese fast-fashion group, has filed confidential paperwork for an initial public offering with the US securities regulator, according to two people briefed about the matter, in what is likely to be one of the largest US listings of the past decade. 

The internet retailer, which became hugely popular during the coronavirus pandemic when millions of people embraced online shopping, has hired JPMorgan Chase, Morgan Stanley and Goldman Sachs to advise it on the IPO. 

Shein is backed by large investors including Abu Dhabi sovereign wealth fund Mubadala, venture capital group Sequoia China and private equity group General Atlantic. It has decided to file for an IPO about a year after it raised cash at a valuation of about $64bn, down by a third from the $100bn valuation it reached during a fundraising round in April 2022.

Despite the decline, a more recent presentation seen by the Financial Times showed that Shein aims to lift its revenues from $22.7bn last year to $58.5bn by 2025.

The filing will give bankers some hope that offerings scheduled for 2024 could help generate the buzz needed to help get the IPO market back on its feet after a miserable two years. 

A recent burst of activity has included the much anticipated $5bn float of chip designer Arm and fashion shoemaker Birkenstock, which raised $1.5bn. While Arm is holding above its float price, roughly in line with broader market performance, Birkenstock is down about 10 per cent. 

By the end of last month, just $19bn had been raised in the US so far this year, according to Dealogic. While that was double the total raised in all of 2022, it was far short of the $154bn managed in the boom of 2021. 

Shein, JPMorgan Chase, Morgan Stanley and Goldman Sachs declined to comment. 

Founded by Chinese billionaire Sky Xu, also known as Chris Xu or Xu Yangtian, Shein has transformed over the past decade from a rapidly growing company in Asia’s largest economy to a global business focused on expanding across the world. 

The US market has now become its largest, with a more than 500-strong marketing operation, 1,400 people working in its warehouse in Indiana and about 1,800 partnerships with designers and artists. 

Shein, which is best known for its extremely low prices, has recently ranked as the second-most popular shopping site after Amazon, the US ecommerce giant, among teenagers, according to a Piper Sandler survey involving 9,193 individuals.

Shein’s growth in the US is being challenged by the rise of Temu, a well-funded Pinduoduo-backed platform that replicates the start-up’s model of shipping products directly from manufacturers in China to shoppers in the west. Goldman Sachs analysts forecast that Temu’s gross merchandise revenue — the total value of goods sold on its platform — will reach $34bn by 2024. 

The Wall Street Journal earlier reported the IPO filing.

Additional reporting by Eleanor Olcott in Hong Kong