Chinese fast fashion giant Shein on track to go public in New York?

(BFM Bourse) – The Chinese ultra-fast fashion giant plans to list on the stock market in the United States, according to the American press. The operation considered “the most important in years” is expected for 2024.

Shein, known for its low-cost clothing, also plans to conquer the New York Stock Exchange. The ultra-fast fashion brand has filed a “confidential” request with the American stock exchange authorities, reported Monday evening le Wall Street Journal.

Confidential filing is a common practice reminds CNBCbecause it allows companies to communicate with the Securities and Exchange Commission (the SEC, the American stock market watchdog) and make any necessary adjustments to their documents in a private setting, before making this file public when the company is ready to enter the stock market.

Also, Reuters specifies that information is not yet clear regarding a filing with the China Securities Regulatory Commission (CSRC) for the IPO of Shein in the United States. Chinese companies are required to obtain authorization from the CSRC before they can list abroad.

The operation “could take place in 2024,” sources close to the matter told the Wall Street Journal, provided that Shein completes the process.

A valuation of $90 billion?

As for the valuation assigned to Shein, it is subject to debate. “It is not clear how much the company is currently worth, but its valuation has been at the heart of debates between Shein and the advisors with whom it works,” people familiar with the matter also told CNBC.

But a recent operation was able to give some indications. The company was indeed valued at more than $60 billion during a fundraising in May, reports for its part Reuters, When Bloomberg reported in early November that the company was targeting a valuation of up to $90 billion.

With such a valuation, Shein is therefore on track to achieve the “most important” IPO in years, continues the Wall Street Journal. The investment banks Goldman Sachs, JPMorgan Chase and Morgan Stanley have been mandated to work on the IPO of the Chinese fast fashion giant, add these same sources.

A return of IPOs in 2024?

This is not the first time that Shein has considered an IPO in the United States. In 2020, the company began activating this project before abandoning it due to the Covid-19 pandemic and growing tensions between the United States and China.

Shein was founded in 2008 in China and quickly found its audience looking for constantly renewed collections at very low prices. In 2022, the company had revenue of $23 billion and net profit of $800 million.

It’s not just Shein that is considering an IPO. In a completely different area, the social network Reddit is also considering launching into the markets and would be at the head of a cohort of candidates “testing the waters”, reported Monday evening Bloomberg. Skims, Kim Kardashian’s clothing company, is also exploring possible options, including an IPO, Bloomberg adds.

These files will probably make us forget a complicated year 2023 on the IPO market. On Wall Street, the debut of sandal manufacturer Birkenstock last September was more of a misstep than a success. To date, the stock of the German sandal specialist founded in 1774 is trading below the price of $46 per share retained for the operation.

In Europe, the results are not rosy either. CVC, the parent company of Panzani, which planned to take its first steps in November, finally decided to postpone its entry on the Amsterdam Stock Exchange until 2024. Market conditions were not conducive to welcoming what should be the biggest IPO of the year on European soil.

In Paris, Planisware also threw in the towel the day before its IPO, on October 11. Here too, the operation was expected by the entire French financial community.

The software publisher was in fact aiming for an entry into compartment A of Euronext Paris – reserved for the largest capitalizations of more than 1 billion euros – which had not seen any new entrants since OVH Groupe, the European leader cloud computing services, in October 2021. The balance sheet is therefore meager on the Paris Stock Exchange since the five new entries on the Parisian market were made on Euronext Growth. The Angevin company Stif, specializing in protective equipment against the risks of explosions in industrial environments, indicated last week that it was also aiming for an IPO in the flagship segment of small and medium-sized businesses.

Sabrina Sadgui – ©2023 BFM Bourse