Shein scrapped plans to file an IPO in the wake of Russia’s attack on Ukraine and ensuing chaos in the financial markets.
The 14-year-old Chinese fast-fashion giant was looking to publicly list later this year in New York. Last year, TikTok’s most-buzzed-about brand was an early frontrunner in the bidding for bankrupt Arcadia’s Topshop and Topman brands and was said to offer about $409.7 million after Next plc backed out. Asos eventually purchased the duo for $363.2 million sans stores but Shein’s offer laid bare its ambitions to expand its reach in global fashion.
Shein manages production, manufacturing, and fulfillment in house. The company behind the most downloaded shopping app was thought to be investing 15 billion yuan ($2.4 million) to build a global supply chain center in the southern Chinese port city of Guangzhou, but a document that reportedly was published on a local government website detailing construction plans has since disappeared. A Shein representative was unable to provide any details.
The newly ESG-aware company has been noncommittal about IPO plans, although financial sources last summer confirmed that one was in the works. While Shein has on occasion refuted the public offering plans, it has mostly chosen to stay mum perhaps because it already shelved a previous IPO scheme two years ago in the wake of the U.S.-China trade war‘s roiling effect on the markets. Existing investors include Sequoia Capital China and Tiger Global Management. Reuters first reported on Shein’s decision to shelve the public offering.
Dow futures fell more than 500 points Sunday night, setting the stage for an unpredictable week. Tensions escalated over the weekend as Western leaders barred some Russian banks from the high security network SWIFT, which facilitates payments among financial institutions in 200 countries. Russian President Vladimir Putin retaliated by putting his nuclear forces on high alert. Meanwhile, representatives for both Ukraine and Russia have agreed to hold talks at the Ukraine-Belarus border on Monday “with no conditions,” Ukraine President Volodymyr Zelensky’s office said Sunday.
Skittish investors and unsettled markets could mean that Shein may not be the only company thinking twice about going public. Last week, word surfaced that L Catterton, backed by LVMH Möet Hennessy Louis Vuitton and its chairman Bernard Arnault, had hired investment bankers to help it prepare for a public listing. According to PitchBook, the private equity firm has about $30 billion of assets under management, and could possibly seek a valuation of up to $3 billion in an IPO. L Catterton, like Shein, began exploring a possible IPO last summer. The Wall Street Journal reported last week that the private equity firm hired Goldman Sachs and Morgan Stanley with eyes on a summer listing.