BEIJING – Fast fashion giant Shein has seen its profits soar, more than doubling to over US$2bn amid preparations for a stock market listing in either New York or London.
According to sources close to the company who spoke to the Financial Times, Shein recorded sales of approximately US$45bn last year. Despite being founded just in 2008, Shein has rapidly emerged as one of the most profitable fashion companies globally, surpassing renowned brands like H&M, Primark, and Next in terms of profitability.
While Spanish fashion retailer Inditex, the parent company of Zara and Bershka, still outpaced Shein in terms of revenue, bringing in €6.9bn last year, Shein’s growth trajectory is remarkable.
Earlier this year, data from GlobalData suggested that Shein is on track to overtake Zara in the UK market within the next two to three years. Analysts estimate that Shein generated over £1.3bn in clothing sales in the UK in 2023, holding a 2.2 per cent share of the country’s £60.3bn clothing market, while Zara sits slightly ahead at 2.4 per cent.
The momentum of Shein’s expansion has caught the attention of global financial hubs. In February, Chancellor Jeremy Hunt engaged in discussions with Donald Tang, Shein’s executive chair, in an effort to persuade the company to opt for a listing in London, potentially one of the city’s largest flotations.
Reportedly, Shein is considering a London listing amid concerns that its application for a US listing may face rejection from the US Securities and Exchange Commission. London appears to be the frontrunner among potential stock markets, including the US, Singapore, and Hong Kong. If Shein proceeds with a London listing, it could become one of the city’s most significant corporate listings to date, with a valuation of up to US$90bn, as reported by The Guardian.
Founded in 2008, Shein has achieved rapid success by offering affordable clothing and lifestyle products, boasting a catalogue of over 2,000 new styles added daily. In a fundraising round in April 2022, the company secured a valuation of US$100bn, solidifying its position as the third most valuable start-up globally.