Chinese fashion retailer Shein is in talks to raise up to $3 billion at a reduced valuation of $64 billion, the Financial Times reported Wednesday, citing people familiar with the negotiations.
The latest valuation is nearly 36% lower than the $100 billion the company was reportedly valued in last year’s funding round.
Big tech and growth stocks bore the brunt of a prolonged slump last year, exacerbated by aggressive rate hikes that saw the tech-heavy Nasdaq Composite Index drop 33% in 2022.
A slump in global markets following Russia’s invasion of Ukraine and ensuing Western sanctions was the finishing blow, prompting companies, including Shane, to put their U.S. listing plans on hold, Reuters reported last year.
The online retailer is about to close a new funding round from existing investors, including Abu Dhabi’s Sovereign Wealth Fund Mubadala, venture capital group Sequoia China and private equity group General Atlantic, the report added.
“Shayne denies the accuracy of some of the information,” the spokesperson said, without elaborating.
Not sold in China, Shein has grown to become one of the world’s largest online fashion marketplaces since it launched in Nanjing in 2008. We produce our garments in China and sell them online in our largest markets, Europe and Asia, the United States.
Products like $10 dresses and $5 tops help draw hundreds of millions of visitors to their websites each month.
The company will generate revenues of around 100 billion yuan ($15.7 billion) in 2021 and was valued at $50 billion at the beginning of the year.
The company has long been criticized for working conditions along its supply chain. Its ultra-low prices and lack of transparency have also led labor watchdogs, such as the Labor Rights Consortium and the Business and Human Rights Resource Center, to question how cheaply they produce their goods.
Written by Nikhet Nishant and Menaz Yasmin. Edited by Maju Samuel and Shailesh Kuber
Fast-fashion startup uses Shane’s own strategy against it
The impact on Chinese retailer manufacturing is equally seismic. Today, Shein’s groundbreaking supply chains are enabling brands in new neighborhoods to take full advantage of the backwater operations of giant retailers.