©Reuters. The Shein logo photographed at the company’s offices in Singapore’s central business district, October 18, 2022.Reuters/Chen Lin/File photo
Written by Kane Wu and Anirban Sen
(Reuters) – Chinese-founded fashion company Shein has secretly filed to go public in the United States, two sources familiar with the matter told Reuters on Monday.
Goldman Sachs, JPMorgan Chase & Co. (NYSE:) and Morgan Stanley have been hired as lead managers for the offering, with Mr. Schein potentially going public in 2024, people familiar with the matter said.
The fast fashion giant’s move to go public comes as the initial public offering market is struggling to recover following a series of stock market downturns in the United States.
There have been four big IPOs in recent months, three of which disappointed investors.Shares in German sandal maker Birkenstock (NYSE:), grocery delivery app Instacart (NASDAQ:) and chip designer arm Holdings (NASDAQ:) fell below its IPO price in the days following its debut, but Arm’s stock is currently trading above that price.
“I don’t think it’s the best time for Mr. Shayne to go public, but if they need capital the market is open, at least it has rebounded from its lows over the past few weeks and investor sentiment is more “It’s more positive than it was a few weeks ago,” said Jason Benowitz, senior portfolio manager at CI Roosevelt.
“…if investors can look back at their financials, we expect to see fairly strong growth by historical standards…The key question is whether they can maintain this pace or continue to share market share.” “The question is whether we can continue to acquire these,” he said.
Shein has begun discreet road shows for the float in the United States, said one of the people, who asked not to be identified to protect confidentiality.
The company’s move comes amid increased scrutiny of the company by US lawmakers.
In August, Republican attorneys general from 16 U.S. states asked the Securities and Exchange Commission to audit Chinese-founded fast fashion retailer Shein’s supply chain for forced labor ahead of its potential IPO.
Shein, known for its $10 tops and $5 biker shorts, flies the majority of its products to shoppers from China in individually addressed packages.
The direct shipping strategy allows the company to avoid unsold inventory building up in warehouses and to take advantage of the “de minimis” provision that allows e-tailers to exempt cheaper items from import taxes in the United States, one of its largest markets. was able to be avoided. From customs duties.
The tax provision is currently under increased scrutiny from Congress, with critics saying it allows companies to avoid high tariffs on Chinese goods.
Reuters reported in July that Schein, which has canceled its IPO plans almost twice, is working with at least three investment banks on a possible IPO and is in talks with the New York Stock Exchange and Nasdaq. Ta.
Mr. Shein, who is currently based in Singapore, declined to comment. Goldman and JPMorgan declined to comment, while Morgan Stanley did not immediately respond to a request for comment.
The company was valued at more than $60 billion as of May, making it the most valuable Chinese-founded company to go public in the U.S. since ride-hailing giant Didi Chuxing debuted in 2021 with a valuation of $68 billion. It is expected that
Fast-fashion retailers are growing in popularity in the U.S., with Shine taking market share from the likes of Gap as shoppers seek fresher styles and trendier clothing.
In August, Shane formed a partnership with SPARC Group, a joint venture between Forever 21 owner Authentic Brands and mall operator Simon Properties (NYSE:), to expand its market reach and capitalize on growing demand for its products. We partnered.
However, Shein and Temu.com have not been able to convert shopper visits to their sites into sales, compared to market leader Amazon.com (NASDAQ:), which has been able to convert visitors into buyers. We are far behind.
Mr. Schein’s secret IPO was first reported by the Wall Street Journal early Monday.