Online fast-fashion retailer Shein is preparing for a London stock market listing at a significantly reduced valuation of approximately $50 billion, nearly 25% lower than its 2023 fundraising valuation. The move comes as the company faces increasing regulatory challenges, particularly in the United States, where the removal of a key import duty exemption threatens its profitability.
A recent policy change by the Trump administration eliminated the “de minimis” duty exemption, which had previously allowed shipments under $800 to enter the U.S. without import taxes. Analysts believe the removal of this rule will increase Shein’s costs and potentially lead to higher prices for American consumers, impacting its largest market.
The final valuation of Shein’s initial public offering (IPO) will depend on how this policy change affects its business operations. Since the regulation was only recently revoked, investors and analysts are still assessing its full impact. Shein, along with its competitor Temu, was responsible for over 30% of all daily shipments to the U.S. under the de minimis provision, according to a congressional report.
Shein had initially planned to list in the U.S. but faced pushback from lawmakers over concerns related to alleged labor malpractices and ongoing legal disputes with competitors. In response, the company shifted its IPO plans to London and confidentially filed paperwork with the UK’s Financial Conduct Authority (FCA) in June. However, the approval process has taken longer than expected, with the FCA yet to issue a final decision.
The UK government remains supportive of Shein’s potential listing, as it seeks to attract high-profile IPOs to the London market. Recent regulatory changes aim to make the UK a more attractive financial hub for global companies. Despite this, the ongoing delays and valuation cuts highlight the uncertainty surrounding Shein’s public debut.
Shein’s last fundraising round in 2023 valued the company at $66 billion, already a significant decline from its peak valuation the previous year. If the upcoming IPO proceeds at the newly estimated $50 billion valuation, it would mark the second consecutive funding round where the company has accepted a lower valuation.
As Shein navigates regulatory hurdles in both the U.S. and the UK, investors are closely watching its ability to maintain profitability while adjusting to new trade policies. The company’s listing in London, if approved, would be one of the most significant IPOs in the UK market in recent years, despite the ongoing challenges.
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