Shein's net profit took a significant hit in 2024, plummeting by almost 40%, casting uncertainty over its highly anticipated London stock market listing.
The fast fashion group saw its profits fall by more than a third last year, posing additional challenges to its flotation plans, which could be one of the largest on the London Stock Exchange this decade, as reported by .
As reported by the Financial Times on Sunday, the Singapore-based retail behemoth recorded a net profit of $1bn, falling short of its initial forecast of $4.8bn.
Despite achieving a 19% increase in annual sales to $38bn, Shein faced difficulties in the final quarter due to intensified competition from Chinese competitor Temu.
Initially targeting a 2024 IPO in New York, the rival company shifted its focus to London after failing to secure US regulatory approval.
The listing is now shrouded in uncertainty amid geopolitical tensions and investor apprehensions regarding its valuation.
Recent reports suggest that investors are pressuring the fast fashion leader to cut its valuation by two-thirds from its peak if it proceeds with the London Stock Exchange float.
Valued at $66bn during a funding round in 2023, investors are advocating for a reduced valuation around $30bn to bolster the IPO's chances.
This adjustment to bridge the "cavernous gap" between Shein's past and potential stock market valuation is seen as a move that could enhance the likelihood of the IPO proceeding, according to insights from two major investment platforms.
AJ Bell investment director Russ Mould commented: "It makes sense that investors want a discounted valuation for Shein before agreeing to back the IPO". The listing could be postponed until the latter half of this year, necessitating Shein to refile paperwork with º£½ÇÊÓƵ regulators.
Shein also confronts potential cost hikes following US President Donald Trump's decision to terminate a tariff exemption that permitted it to deliver low-value shipments to American customers duty-free.
The company has ramped up expenditure on marketing and logistics as it vies with Temu for market share.
Shein has been approached for comment.
