Shein’s IPO: Set to be one of the Largest in History
Shein, a major player in the fashion e-commerce space, has officially declared its intent to go public in what is anticipated to be one of the largest initial public offerings (IPOs) in history. The IPO is supported by lead underwriters Goldman Sachs, Morgan Stanley, and JP Morgan. Despite facing a decrease in valuation from $100 billion to $64 billion, as observed in a fundraising round in April 2022, Shein has ambitious plans to elevate its revenues significantly.
A recent presentation, viewed by the Financial Times, outlines Shein’s target to surge revenues from $22.7 billion in the previous year to an impressive $58.5 billion by 2025.
The IPO filing is expected to inject vitality into the IPO market, providing a beacon of hope for 2024 offerings amid a challenging market landscape. However, Shein confronts multifaceted challenges that could influence its public debut.
Previous controversies involving copyright infringements, allegations of adverse working conditions, and sustainability concerns are pertinent factors that could impact Shein’s environmental, social, and governance (ESG) standing. Notably, Shein has denied claims of poor working conditions, but 16 attorney generals have urged the SEC to scrutinise potential forced labour in its supply chain.
In the wider context of recent IPO performances, including Birkenstock, Instacart, and Arm Holdings, all experiencing post-IPO declines below their offering prices, market participants remain watchful of Shein’s debut. The outcome of Shein’s IPO will be closely monitored as it faces challenges to conform to ESG standards and whether the offering price aligns with the valuation.
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