TMTPOST -- China-founded online fast fashion giant Shein seems making new push in pursuit of a blockbuster initial public offering (IPO)in the United Kingdom.
Credit：Shein X Account
Shein hire the former European Union budget commissioner Günther Oettinger as a consultant to help it navigate the bloc』s policy environment, a Bloomberg reporte Tuesday cited a company representative. To enlist a former top EU official suggests Shein is making efforts to bolster its lobbying across the region, taking a more active stance toward potential regulatory scrutiny as its IPO nears, according to the report. Ursula von der Leyen, president of the European Commission, denouned Shein as poison in 2021 due to the environmental impact of cheap, disposable clothes.
Two months ago, Shein was reported to file a confidential prospectus with the Financial Conduct Authority for approval ahead of its potential float in the U.K., which would value it at about £50 billion. The confidential filling doesn』t mean an offering is imminent and the flotation is unlike to start before the summer at the earliest, Bloomberg reported in June. The Financial Times reported late June that Shein is keeping alive a fallback option to list in Hong Kong despite filing confidential paperwork that month.
The reports came after Shein was said to prepare for a U.K. listing as hurdles it faces in the U.S. remains. Shein plans to update China』s securities regulator on the change of IPO venue and could file with the London Stock Exchange (LSE) due to regulatory hurdles in U.S. and pushback from American lawmakers, Reuters cited people familiar with the matter last month.
Shein was said to confidentially file for U.S. IPO last November and approached the China Securities Regulatory Commission (CSRC) to seek approval the same month. While the plan to float itself in U.S. is still on the table, Shein has started to explore a listing on the LSE with its financial and legal advisors early this year, and has contacted London-based fund managers for introductory meetings ahead of its planned listing, according to the Reuters report.
Founded in 2012, Shein has expanded its presence to over 150 countries and replaced ZARA and H&M in the U.S. market as the benchmark of the new-generation fast-fashion brands, with products sourced entirely from the Chinese supply chain.Shein was reported to consider IPO recent years, even its valuation dropped sharply from its peak , a warning signal reflecting its explosive growth was fading and was overtaken by Temu, an overseas platform launched by Chinese e-commerce giant PDD Holdings Inc. in last September.
A funding round of $1 billion in April 2022 brought Shein』s valuation to a peak of $100 billion. The fast fashion retailer accordingly entered into the top three most valuable private companies in the world, behind another TikTok parent ByteDance and the aerospace unicorn SpaceX, according to CB Insights, a global startup database and business analytics platform. The valuation also suggests Shein would be a fast fashion Titanic that overtakes the combination of two European rivals—H&M Hennes & Mauritz AB and Zara』s owner Inditex SA.
However, valuation of Shein and other startups kept dropping since then as wary toward risk assets increased amid uncertain economic outlook and higher interest rates. Shein was in talks with potential investors to raise up to $3 billion and the new fundraising would value the unicorn at $64 billion, shrinking more than a third from its valuation peak in April 2022, the Financial Times reported in January 2023. Reuters later learned Shein was valued at $60 billion after it raised around $2 billion in a new founding round in March.
Bloomberg reported in last November that Shein is targeting to be valued up to $90 billion through its IPO in U.S. $90 billion is much higher than the valuation that the market priced in at that month. In the secondary market, stakes that have recently changed hands valued Shein at about $50 billion to $60 billion, Bloomberg』s sources said.