Shein’s made another move in anticipation of its IPO, naming former Bear Stearns investment banker Donald Tang as executive vice chairman as the company considers an international stock market listing.
“Donald has long been a trusted advisor to Shein, and we are thrilled that he is joining our leadership team in an official capacity as executive vice chairman,” a Shein spokesperson said in response to a Sourcing Journal request for comment after Forbes reported the news. “He brings a wealth of experience across business and corporate development, M&A, strategic partnerships, finance and stakeholder affairs, and is well placed to help our company further build on its success.”
In April, the fast-fashion giant was valued at $100 billion in a funding round, making the China-based seller worth more than the combined market capitalizations of competitors H&M and Zara-owner Inditex. A more recent Financial Times report brought that number down by as much as one-third, estimating Shein’s valuation between $65 billion and $85 billion as of last month.
Arguably, a valuation-in-limbo is the least of the e-tailer’s problems.
Freelance artist Maggie Stephenson sued Shein based on design theft and copyright infringement, resulting in a $100 million lawsuit. Shein and Shein Distribution Corp. have been sued for infringement and/or unfair competition in more than 30 separate actions in the Central District of California alone, including lawsuits filed by Stussy and Doc Martens. An undercover investigation by Britain’s Chanel 4 found that Shein workers earn as little as 3 cents an hour during 18-hour shifts with one day off per month. Further labor violations were unearthed amongst the dangerous working conditions exposed by Swiss watchdog group Public Eye, made worse by the fact that the Chinese monolith has failed to divulge working conditions along its supply chain as is legally required by the United Kingdom. The CBC has linked Shein to PFAS, and its parent company Zoetop Business Company was fined $1.9 million last month for a data breach. Environmental watchdogs are constantly criticizing the e-tailer’s moves.
Despite all the controversies surrounding the brand, Gen Z loves Shein—a stark contrast from its allegedly sustainability-championing ethos. As TikTok’s top-mentioned brand, Shein raked in $15.7 billion in revenue last year and is a powerhouse for daily new styles at drop-dead prices. As of May 2021, the most downloaded app accounts for 28 percent of the fast-fashion market.
Amid all of this—the good and the bad—what does the promotion of Tang mean for Shein?
Tang has a history of working as an advisor for Shein’s CEO and co-founder, Chris Xu, for more than a year, Forbes reported. He’s known for supporting major international investors in making deals in China. Bloomberg reported that Shein plans a New York listing as soon as 2024, with Reuters stating Xu is now a permanent resident of Singapore in an effort to sidestep China’s rigid rules for Chinese companies listing overseas.
And if Shein were to have a stock market listing, Forbes reported, it would be the largest float since Chinese ride-hailing company Didi went public in 2021 with a $70 billion valuation. All to say, Tang’s hire appears to be part of Shein’s major push to be more attractive to international investors. Earlier moves include hiring two federal lobbyists and building a U.S. headquarters in Washington.
Furthering its entry into the U.S. market, Shein has recently announced a partnership with Pitney Bowes to lead its delivery efforts in certain American markets.
Just north of the U.S. border, Shein has expanded into a 170,000 square-foot warehouse and office space in the Greater Toronto Area, allowing the Christian Siriano collaborator to not only reach Canadian clientele, but streamline its distribution much more seamlessly abroad. This comes after the juggernaut set up a distribution center in Indiana with similar plans for Southern California.
“For over a decade, Shein has provided accessible and affordable apparel and lifestyle products to Americans across the country. We’re proudly expanding our business and operations in the U.S., adding roughly 1,000 new jobs this year alone,” a Shein spokesperson said. “As a member of the business community in America, Shein will engage policymakers and participate in discussions that will help us continue to add value to the U.S. economy, support our American workers, and bring industry-wide benefits to consumers.”
It also put down roots in Tokyo with the opening of a permanent event space in the trendy Harajuku neighborhood that’ll initially serve as a showroom before flexing for special events and “meet-and-greets.”
Tang, who has deep connections in Hollywood through Tang Media Partners and Global Road Entertainment, is already raising Shein’s growing profile. He took to the Web Summit stage in Lisbon last week to tell the event’s more than 70,000 attendees how the company has “successfully embedded technology into our unique on-demand business model.”
Though he said Shein’s tech-driven “efficiency gains” enable less than 2 percent pre-consumer inventory waste, the company stood up a $50 million fund earlier this year to address the mounting problem of Global South-polluting textile trash once shoppers are through with their low-cost purchases.
Additional reporting by Matt Hickman and Jessica Binns.