Fast-fashion behemoth Shein is facing investor pressure to cut its valuation by two thirds from its peak, should it proceed with its anticipated float on the London Stock Exchange later this year, a report suggests.
Shein was valued at $66bn (£52bn) in a funding round in 2023 and as high as $100bn in 2022, but a Bloomberg News report on Monday indicated that its backers are urging a reduction in its valuation to $30bn, as reported by .
The "cavernous gap" between Shein's past and potential stock market valuation improves the chances of the IPO proceeding, according to two major investment platforms.
"It makes sense that investors want a discounted valuation for Shein before agreeing to back the IPO", stated AJ Bell investment director Russ Mould.
"Slashing the valuation gives the IPO a better chance of going ahead... There are so many risks involved with the investment case that investors will want a cut-price deal as compensation," Mould added.
Obstacles to Shein's debut on the London Stock Exchange include queries over its alleged use of forced labour in its supply chains, supposed intellectual property infringements and concerns about governance and transparency.
The latest worry has been the threat to its business model posed by US President Donald Trump. Trump has vowed to close a shipping loophole which allows fast-fashion giants Shein and Temu to evade customs and tariffs when shipping small packages of goods. The EU may follow suit
"[Shein] is highly reliant on keeping prices low and this has been helped by the firm not having to pay import duties on millions of low-value packages," commented Susannah Streeter, head of money and markets at Hargreaves Lansdown. "If Shein can't compete so easily on price in major markets like the US and the EU, it'll be a much harder sell [to investors], particularly given it also faces claims of environmental recklessness and poor working conditions in its supply chains," she added.
Despite these challenges, both Streeter and Mould anticipate that the IPO will proceed, though possibly at a reduced valuation. "The fact Shein is still battling it out suggests it remains confident of getting enough investor support to list its shares," stated Mould.
Shein has chosen not to comment on the matter.
