Facing Ruvic (Portal)
Shein's alternatives to going public seem hopeless. According to Bloomberg, the fast-fashion retailer is eyeing London, Singapore, Hong Kong and other locations as its U.S. listing hits a hurdle. These markets would allow the investors of the profitable company to make money faster. But if Shein wants to hit its $90 billion valuation target, New York continues to dwarf the rest.
The company, founded in China, has been working on an IPO in New York since at least 2020. But deteriorating relations between China and the United States and market volatility forced it to postpone its plans several times. Despite founder Chris Xu's efforts to distance the Singapore-based company from its Chinese roots and diversify supply chains, its latest attempt to debut in New York is running into several obstacles. Washington lawmakers demand more information from China about its operations and risks; The supervisory authorities in Beijing are also examining the offer.
So a plan B makes sense. A move to London or another destination in Europe where H&M or Inditex operates makes some logic. The region is also one of its largest markets. Asia's financial centers will undoubtedly roll out the red carpet for Shein. Singapore has the most international stock market in the region, with nearly 40% of its listings coming from other countries, while Hong Kong is one of Asia's biggest deposit destinations despite the decline in Chinese stocks. Neither has registered any million-dollar IPOs for years.
For promoters like Sequoia and General Atlantic that want an exit route, Shein's decision to go public presents a difficult dilemma. U.S. markets are doing better: In 2023, the S&P 500 is up 28% and the Nasda is down up 40%. On the other hand, the leading indices of London, Singapore and Hong Kong fell during this period. Recent debuts in New York have also paid off: Arm's stock has more than doubled since its initial public offering in September, while China-linked Amer Sports has gained a fifth. Shein's Plan A remains the most attractive.
The authors are columnists for Portal Breaking Views. The opinions are yours. The translation by Carlos Gómez Abajo is the responsibility of Five days
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