Shein Says No Go on IPO Rumors

Vicki M. Young
·4 min read

Did it or didn’t it confidentially file for an IPO? Only Shein knows for sure.

A Shein spokeswoman on Friday told Sourcing Journal that the fast-fashion digital retailer “denies these rumors,” addressing a Reuters report this week claiming the company confidentially lodged paperwork with the Securities and Exchange Commission (SEC) for plans to trade on the New York Stock Exchange.

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The conflicting information about an IPO comes after a group of U.S. House of Representatives members urged SEC chair Gary Gensler not to register the Christian Siriano collaborator until it’s sure the company doesn’t exploit the persecuted Uyghur minority that populates China’s cotton-rich Xinjiang region.

Shein, one of TikTok’s most-buzzed-about brands, had looked at going public last year but the financial markets’ volatile response to Russia’s Ukraine invasion nixed those plans. In March it raised $2 billion from an investor group led by private equity firm General Atlantic, with participation from existing backers Abu Dhabi sovereign wealth fund Mubadala and venture capital firms Sequoia Capital and Tiger Global Management, among others.

Shein has long been cagey about financial speculation. When $64 billion instead of $100 billion was floated as its valuation earlier this year, a Shein spokeswoman told Sourcing Journal that the company “denies the accuracy of some of the information reported,” without clarifying further.

Shein’s attempt to go public three years ago ran into a snag when the U.S.-China trade war chilled the markets. The third time could be the charm now that recent developments suggest a slow IPO market looks to be opening up.

Matthew Kennedy, senior strategist at IPO tracking firm Renaissance Capital, expects IPO activity will pick up in the second half. He pointed to fast-casual restaurant chain Cava Group Inc.’s strong June 15 trading debut as a positive sign heading into the third quarter.

Cava’s IPO was followed on Thursday by the well received IPO of Savers Value Village Inc., a thrift store business benefiting from the growing pool of cash-strapped consumers trading down to make their dollar stretch. Savers Value, whose majority owner Ares Management retainined a 88 percent stake, raisied over $401 million. The stock opened at $24.77 per share on the New York Stock Exchange, or 38 percent above the $18-a-share price listed in its IPO.

But it hasn’t been smooth sailing for all newly public entrants. Kodiak Gas and Fidelis Insurance, which went public after Cava, priced below their expected range and have been trading lower. While investors seem to be cautious of new offerings, the success of IPOs from Cava and Savers in the discretionary sector—where Shein fits in—could bode well for later this year if the IPO window stays open.

An IPO makes sense since private funding can only take Shein so far, given its growth plans. Another reason for the interest in Shein is its high profile. Its current valuation indicates it would be among one of the largest IPOs in history, placing it in the company of giants such as Facebook and Alibaba.

But while Shein has captured the hearts and wallets of consumers addicted to $4.50 cut-out crop tops, $15.25 jeans, and $3.50 bras, the company faces scrutiny by U.S. congressional leaders and policymakers elsewhere concerned about forced labor in its supply chain. What’s more, the Shut Down Shein coalition accuses the e-tailer of exploiting U.S. customs laws to avoid paying billions in tariffs. Shein meanwhile has hired lobbyists from Akin Gump and Hobart Hallaway & Quayle to “protect its tax and trade loopholes.” And earlier this month, French center-left political party Place Publique, led by European parliamentarian Raphaël Glucksman, blasted Shein for using fossil-fuel-based materials as a “weapon of mass climate destruction.”

Then there’s the problem virtually every marketplace operator runs into. Social media users this month spotted fakes from third-party sellers, such as knockoff Jordan 11 sneakers on its platform. Shein, which has since removed the offending product from its website, said it requires marketplace sellers to certify that products do not infringe on the intellectual property of others, and that it has “zero tolerance” for forced labor.

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