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Fast Fashion Giant Shein files for IPO in the US

Amrusha Chati

Amrusha Chati

28 November 20234 mins min read

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Fast Fashion Giant Shein files for IPO in the US

Chinese fast fashion giant Shein has confidentially filed for an IPO in the U.S. Shein has reportedly filed to go public in the U.S. in a bid to expand its global reach and raise funds from the capital markets.

The Wall Street Journal reported late evening on Tuesday, 27th November 2023, that unnamed sources within the company have confirmed that Shein has filed for an IPO. Though the date for the IPO hasn't been decided yet, the company could be listed for trading on public markets as early as 2024.

But it may face considerable obstacles. It's been under heavy regulatory scrutiny for the past couple of years. Despite the controversies around it, the Shein IPO is being touted as one to watch for next year.

Let's take a closer look at the company to understand why there's more to this IPO than meets the eye.

Shein's rise to fast-fashion fame

Shein was founded by Chinese billionaire Chris Xu in 2008 out of Nanjing, China. It started as an e-commerce website selling wedding dresses made in China and was initially named SheInside.

In 2015, when Xu shifted focus to fast-fashion apparel, the company rebranded as Shein. The COVID pandemic a few years later caused a prolonged lockdown during which "quarantine shopping" boosted Shein's popularity.

In 2022, Shein generated revenue of $30 billion, which was a 91% increase from the previous year. It has more than 74.7 million active shoppers globally.

It was also valued at $100 billion in 2022, making it more valuable than its competitors, H&M and Zara combined.

Shein's dramatic rise also put it on the radar of various authorities and regulation agencies across the world.

In the US, three designers filed a copyright infringement lawsuit against Shein for using their original designs without permission. It alleges that “Shein is a fast fashion behemoth that thrives through irredeemable intellectual property theft.”

The lawsuit also pushed for Shein to be held accountable under the Racketeer Influenced and Corrupt Organizations Act (RICO), which addresses the exploitation of legal businesses by organized crime.

Shein is owned by what the complaint describes as a "byzantine shell game of a corporate structure." In fact, "there is no single company that can be identified as Shein." The lawsuit claims that this "decentralization" further facilitates Shein's "criminal infringement and other racketeering activity," which makes it liable under the civil provisions of RICO.

Shein, however, protested this as being an overreach of the RICO law provisions. "If accepted, plaintiffs' RICO overreach and strained interpretation of 'criminal copyright infringement' would expose nearly every multinational corporation with a global supply chain and a corporate structure designed to facilitate worldwide sales to RICO liability whenever ordinary copyright or trademark infringement is alleged," the company said.

Shein's obstacles to a US IPO

Shein is no stranger to controversy, and some of these may become obstacles to going public. It moved its headquarters from Nanjing, China, to Singapore in 2021. This was apparently done to circumvent China's protectionist trade policies.

In the US, it will still need to work hard to build trust with regulators and government entities. Over the last year, it has been under fire for claims of copyright infringement, evading custom fees, and reports linking the company's cotton source to Xinjiang. The area has been identified as a hub for exploiting the labor of persecuted ethnic Uyghurs.

In fact, a bipartisan group of 22 lawmakers wrote an open letter to the SEC. The letter strongly urges the SEC to crack down on Shein ahead of the IPO filing.

The letter says, "SHEIN has come under heavy criticism for utilizing underpaid labor in its supplier factories and violating human rights. A Bloomberg analysis has found scientific evidence that cotton from the Xinjiang Uyghur Autonomous Region (XUAR) was present in clothing sold by SHEIN in 2022. While SHEIN claims its products do not utilize Uyghur forced labor and it works with third parties to audit its facilities, experts counter these types of audits are easily manipulated or falsified by state-sponsored pressure. Other experts argue that it is appropriate to presuppose that any product made in the XUAR is made with forced labor".

It demands that the SEC set regulations requiring Shein to submit to independent verification that it does not use Uyghur forced labor in order to be eligible for an IPO.

Shein has denied these claims and did not respond to a request for comment about the upcoming IPO. But it is supposedly in talks with the New York Stock Exchange and the Nasdaq for the IPO. Goldman Sachs, JPMorgan, and Morgan Stanley will underwrite the offering.

The company, currently at a lowered valuation of $66 billion, hopes to raise $90 billion from the IPO. It has also been trying to get a foothold in the US business landscape in preparation for the IPO.

Recently, it acquired a third of the Sparc Group. This joint venture includes brand management firm Authentic Brands Group and mall proprietor Simon Property Group. It could potentially give the company some legitimacy as far as U.S. regulators are concerned.

As the letter to the SEC states, “We strongly believe that the ability to issue and trade securities on our domestic exchanges is a privilege and that foreign companies wishing to do so must uphold a demonstrated commitment to human rights across the globe.”

The next few weeks will reveal if Shein's strategy works to appease the US regulatory system and get the company a green light for an IPO.


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Amrusha is a versatile professional with over 12 years of experience in journalism, broadcast news production, and media consulting. Her impressive career includes collaborating extensively with prominent global enterprises. She garnered recognition for her exceptional work in producing acclaimed shows for Bloomberg, a renowned business news network. Notably, these shows have been incorporated into the esteemed curriculum of Harvard Business School. Amrusha's expertise also encompassed a 4-year tenure as a consultant at Omidyar Network, a leading global impact investing firm. In addition, she played a pivotal role in the launch and content strategy management of the startup Live History India.