Shein has filed confidentially for an IPO in the US, according to insiders

Shein has reportedly taken a big step by submitting a confidential filing for an initial public offering (IPO) with US regulators.

Shein has filed confidentially for an IPO in the US, according to insiders
A Shein logo is pictured at the company's office in the central business district of Singapore, October 18, 2022. REUTERS/Chen Lin/File Photo

The backstory: Shein, the fast fashion giant, started in China in 2008 and later set up its headquarters in Singapore. By 2017, Shein had its eyes on the US, quickly becoming the go-to spot for trendy, budget-friendly clothing. Now, there’s been some talk of Shein potentially chasing after US$2 billion in funding and eyeing a debut on the US stock market. But no official filing had surfaced while those rumors were swirling. 

Shein hasn't been without controversy – criticism has surfaced regarding labor conditions at its factories, churning out lower quality garments, creating excessive waste and other issues common with fast fashion companies. Shein and Temu, along with other companies, were even flagged in a US congressional report for some related concerns. Despite these controversies, Shein expanded globally last year, with more distribution centers in the US, Canada and Europe and manufacturing hubs in Brazil, Turkey and India.

More recently: Last month, Shein announced a collaboration with its former rival, Forever 21, to launch a co-branded clothing line. Now, Shein's clothing is making its way onto the shelves of Forever 21 stores, increasing its market reach. 

Shein also made headlines last month by acquiring UK brand Missguided from the Frasers Group. The deal sees Shein taking responsibility for manufacturing and selling Missguided's products on both platforms.

The development: Shein has reportedly taken a big step by submitting a confidential filing for an initial public offering (IPO) with US regulators. If this move goes forward, it could lead to a public debut next year. According to insiders, Shein is working with financial heavyweights Goldman Sachs, JPMorgan Chase and Morgan Stanley. As of now, Shein, JPMorgan and Morgan Stanley haven’t yet made any official comments about the IPO. 

Key comments: 

"It doesn't strike me as the most opportune time for Shein to come public, but if they need capital the markets are open ... and investor sentiment has been more positive than it was a few weeks ago," said Jason Benowitz, senior portfolio manager at CI Roosevelt.

"As it is a significant and highly disruptive player in the retail space, Shein will attract a lot of investor interest," said GlobalData managing director Neil Saunders.