Fast-fashion retailer Shein plans to raise up to HK$13.86 billion (about $1.77 billion) in its initial public offering (IPO) starting on September 1. At the highest price, this would value the company at nearly $27 billion. This is a big drop from its peak valuation of around $100 billion in 2022. The IPO comes after failed attempts to list in the US and London due to regulatory issues, according to multiple reports.
Key Details
Shein will offer 280 million shares priced between HK$47.60 and HK$49.50 each. The company reported a loss of $99 million in the first quarter of 2023. This is a sharp decline from a net income of $395 million the previous year. The drop in profits is linked to rising costs and slower sales growth. This has raised concerns among investors about Shein's future.
Background
Cornerstone investors, including Boyu Capital, Tiger Global, and Tencent Holdings, have pledged to buy about $383 million worth of shares. This cornerstone tranche makes up around 22.5% of the total funds Shein hopes to raise. The company plans to use about 80% of the proceeds to improve its technology and expand its brand globally, as noted in its prospectus.
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The IPO could affect the fast-fashion sector, especially competitors like H&M and Primark. Shein's pricing strategy may change due to higher operational costs. Investors will look for the final pricing announcement on August 31, which will set the stage for trading on September 1.
Based on reporting by: bbc.com, bbc.co.uk