Shein To Reduce Valuation To $30 Billion As It Readies Itself For London IPO
According to Bloomberg reports, pressure is mounting on the online retail giant Shein to slash its valuation by $30 billion. This news comes just ahead of the fast-fashion brand’s declaration to go public on the London Stock Exchange in the first half of 2025, and company representatives have yet to make a statement addressing this issue.
Earlier this month, Reuters reported that Shein was set to reduce its valuation to $50 billion, from the 2023 valuation which was $66 billion.
The company’s prospects have reduced with the newly elected Trump administration’s tariff policies, as well as the US President’s announcement to end the ‘de minimis’ duty exemption an import loophole due to which Shein was able to maintain low prices for this long.
The Chinese brand’s road to go public has not been easy. Accusations of harsh labour practices have plagued Shein for many years, with Western countries rallying together in their attempt to ban the import of materials from China’s Xinjiang region, citing horrific abuses against Uyghur people.
With growing geopolitical tensions and an impending tariff war between Washington and Beijing, the company had quietly rerouted its plea to the US Securities and Exchange Commission, anticipating that the New York IPO would not be approved and had since set its sights on London.
Company shareholders are reportedly nudging for valuation adjustments as it would help with the IPO. However, the listing might not go public before the second half of the financial year, depending on the impact of the de minimis being called off.
It was reported in 2023 that Shein and rival Chinese company Temu account for over 30% of all packages shipped to the US daily and under the de minimis provision, the companies were exempted from approximately $800 in import duties.
This IPO listing has come just when the UK government has been pressurising regulators to reexamine the listing rules and tear down the barriers to growth, in an attempt to make London a more attractive market for investments and innovation.
Market analysts have said that the IPO approval is different from case to case and that Shein may face delays, as it requires approval from Chinese regulators such as the China Securities Regulatory Commission (CSRC), and British authorities who are still concerned over Shein’s alleged malpractices and lawsuits.
The Chinese e-commerce company certainly has a rocky road ahead before the London listing is finalised, and with increasing political and economic uncertainties, it remains to be seen how these challenges could potentially affect the brand’s established business model.