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Let’s dive into the fascinating world of Shein, a company known for its affordable yet fashionable swimsuits, and its journey towards an impressive $90B valuation as it readies for its debut in the American stock market.

  • Proposed Value: Shein set the expectation bar high, proposing a valuation of around $90B to potential investors. However, recent developments suggest the sailing hasn’t been smooth.
  • Value Status: In the private trading realm, Shein’s valuation has taken a hit, falling below its May high of $66B. Current estimates place it between $50B to $60B – not an insignificant sum, but certainly less than once projected.
  • Concerns and Hesitations: This changing valuation sheds light on investor concerns about the company’s turbulent path. Allegations of copyright theft, potential forced labor, and fierce competition are clouding the horizon. Just last year, Shein was the third most valuable startup worldwide, boasting a whopping $100B. However, investor caution due to economic instability and climbing interest rates has led to a fall from grace.
  • IPO Details: As of now, Shein’s IPO, inclusive of its valuation and timing, remains a topic of discussion, with the company keeping mum on the details.
  • Origin Story: Born in China a decade ago, Shein has since moved its base to Singapore, although much of its US clothing supply still hails from southern China. Shein recently announced plans to diversify its supplier pool.
  • Possible US Ban: The company’s supply chain practices have come under fire, particularly its alleged use of cotton from China’s Xinjiang region. A forthcoming probe could potentially lead to Shein’s products being banned in the US if the company is found guilty of forced labor. Shein, however, disputes these claims.
  • Competition: Shein also grapples with fierce competition from PDD Holdings Inc.’s Temu. The two have been in a legal tug-of-war, with Temu’s US sales surpassing Shein’s in September.

Despite these hurdles, Shein eyes a net income of $2.5B this year, and has started to diversify its product line, even acquiring a third of rival retailer Forever 21’s parent company, Sparc Group.

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