Shein's alternatives to going public seem unpromising. The fast fashion retailer is eyeing London, Singapore, Hong Kong and elsewhere as its US listing has hit a roadblock, according to Bloomberg. These markets would allow investors in the profitable company to make cash faster. But if Shein wants to reach its $90 billion valuation goal, New York continues to eclipse the rest.
The company founded in China has been working on an IPO in New York since at least 2020. But the deterioration of ties between China and the United States and market volatility have forced it to delay its plans several times. Despite founder Chris Xu's efforts to distance the Singapore-based firm from its Chinese roots and diversify supply chains, its latest attempt to debut in New York is running into several obstacles. Washington lawmakers demand more information about its business operations and risks from China; Regulators in Beijing are also examining the offer.
So a plan B makes sense. Changing to London or another destination in Europe, where H&M or Inditex operate, has a certain logic. The region is also one of its largest markets. Asia's financial centers will undoubtedly roll out the red carpet for Shein. Singapore has the most international stock market in the region, and close to 40% of its listings come from other countries, while Hong Kong, despite the fall in Chinese equities, is one of the largest destinations in Asia for deposits. Of funds. Both have not registered multi-million dollar IPOs for years.
For promoters, including Sequoia and General Atlantic, who want an exit route, Shein's choice to go public poses a difficult dilemma. US markets are doing better: in 2023, the S&P 500 is up 28% and the Nasda is up 40%. On the other hand, the benchmark indices of London, Singapore and Hong Kong fell in that period. Recent New York debuts have also paid off: Arm's stock has more than doubled since its September IPO, while China-linked Amer Sports is up a fifth. Shein's plan A remains the most attractive.
The authors are columnists for Reuters Breakingviews. The opinions are yours. The translation, of Carlos Gómez Belowit is the responsibility of Five days
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