Shein: could the year’s mega-IPO fall apart at the seams?

US stock markets might be flying, but the IPO market remains frozen, said The Economist: "for two long years, private companies have spurned public markets". 

A big hope for Wall Street bankers is Shein, the outsized fast-fashion giant that confidentially filed to go public in the US in November – and even teased London about a possible listing. Shein is a financial prize worth having, said the FT. 

'One of the biggest IPOs of 2024'

Most recently valued at $64bn (more than rivals Zara and H&M combined), it would be "one of the biggest IPOs of 2024". But concerns have been mounting about the Singaporebased company's Chinese roots, and its supply chain's human rights record.

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The latest hitch, said Gabrielle Fonrouge on CNBC, comes courtesy of China's powerful internet regulator, CAC, which has announced a pre-float "security review". This squarely positions Shein as a Chinese company, despite the outfit's efforts to distance itself. The move revives bad memories of DiDi Global, the ride-hailing giant that underwent a similar review days after listing in New York in 2021.

'Sustainability an ultimate IPO risk'

Within a year, it was "delisted and shareholder value was wiped out". Shein – which has never sold garments in China, but sources many of its products there – is taking flak from "both sides". Washington and Beijing both worry about "sensitive data" on customers, workers and partners being leaked to the other side.

Quite apart from geopolitics, Shein's IPO hopes face "an intractable challenge", said Lisa Jucca on Reuters Breakingviews: sustainability. All fast-fashion retail involves a lot of carbon-intensive, hard to recycle polyester-based garments. Shein's sheer size takes the problem to another level; growing unease about "textile pollution" makes it hard to defend. "Shein's waste factor is its ultimate IPO risk."