Fast-fashion giant Shein has postponed its initial public offering (IPO) and is now considering a valuation significantly lower than previously sought, with reports indicating a target range of £19 billion to £20 billion. The company, founded in China and now based in Singapore, was originally slated to float in Hong Kong this month but is now aiming for an early September listing.
This delay and valuation adjustment come in the wake of actions by the administration of former President Donald Trump that targeted tax loopholes previously exploited by companies like Shein. Specifically, Trump's administration revoked an import duty exemption that allowed firms to ship small parcels to the United States without incurring tariffs. This change has impacted Shein's profitability, with the company reporting a loss of £74 million in the three months ending March, a stark contrast to a profit of £296 million in the same period a year prior.
At one point, Shein was pursuing a valuation as high as £74 billion. However, the combined effect of Trump's tariff measures and similar crackdowns on tax loopholes in the European Union has led to a reassessment of its market value. Potential key investors mentioned in connection with the IPO include Chinese private equity firm Boyu Capital, an asset management arm of UBS Group, Chinese internet giant Tencent, and General Atlantic, the owner of Gymshark.