Shein to reportedly slash its valuation for London IPO

Business

Shein pop-up. Credits: Shein

Shein is believed to be cutting its valuation to 50 billion dollars ahead of a planned IPO in London, Reuters has reported. This is a significant drop from the 66 billion dollars the company was expected to be worth in 2023. The cut comes amid a "worsening business outlook" after the US government ended the de minimis tariff exemption, which allowed Shein to keep prices low by exempting shipments under 800 dollars.

It’s not just in the US that Shein is facing changes. The European Commission is also looking into tightening regulations on cheap goods entering the EU via e-commerce. This could impact Shein’s business model, which relies on cheap global imports. The Commission is considering removing the duty-free allowance for packages under 150 euros, which could further increase costs for the retailer.

According to Reuters, analysts are concerned about the impact of the de minimis relief on Shein's profitability. The measure allowed Shein and rival Temu to serve a large portion of the US market without paying import duties, which could impact prices in the future. The US Congressional Committee on China reports that Shein and Temu together send more than 30 percent of the packages shipped to the US each day under the exemption.

Shein’s London IPO has been a long time coming. While the company had originally hoped to go public in early 2025, insiders told Reuters that the date has now been set for Easter (around April 20). The company is still awaiting approval from British and Chinese regulators. Shein reportedly filed confidential documents with the UK Financial Conduct Authority (FCA) in early June 2024, but approval for the listing has been slower than expected. Market experts told Reuters that it typically takes several months for an IPO to receive approval, depending on the specific case.

In addition, Shein must receive approval from Chinese regulators, including the China Securities Regulatory Commission (CSRC), before the company can actually proceed with the IPO.

This article originally appeared on FashionUnited.NL. It was translated to English using AI and edited by Rachel Douglass.

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