Shein Denies US IPO Rumors

Submitted by Anonymous (not verified) on Fri, 06/30/2023 - 13:20

Fast-rising Chinese fashion giant Shein has denied the widespread rumors that it has filed for an initial public offering (IPO) in the US. Rumors had it that the company was planning to go public in the US before the end of the year. At the time, A Reuters report said Shein was considering the New York Stock Exchange (NYSE) for its IPO, but market volatility caused by the Russia-Ukraine war made it suspend its plans. The report cited people with knowledge of the matter and added that the listing could make Shein the most valuable Chinese company to go public in the US since Didi’s IPO in 2021.

Shein Turns Down Alleged US IPO Filing

However, a Shein spokesperson told CNBC:

“Shein denies these rumors.”

This comes shortly after it was accused of exploiting trade loopholes to import goods into the US. A committee exploring economic competition between China and the US, The Select Committee on the CCP, released a report saying that the Chinese fast fashion retailer and Temu did not pay import fees in 2022. In a tweet, the Committee wrote that the companies avoid tax and inspection by the US Customs and Border Protection, “making it impossible to determine if their products are made with Uyghur forced labor in Xinjiang.”

According to the report, both Shein and Temu are responsible for more than 30% of daily shipped packages to the US. The brands process this under the minimis provision of Section 321 of the Tariff Act of 1930. This helps them avoid import tariffs if the fair retail value of the shipment is not over $800. Per the findings, the import accounted for almost 600,000 shipments daily in 2022, which means that it could be higher this year. Hence, lawmakers opined that the tariff violations unfairly placed Shein and Temu over US retailers. While Temu’s valuation is said to be over $100 billion, Shein was recently valued at $64 billion.

Shein’s Allegations

Before denying US IPO plans, Shein was accused of human rights abuses. The company faces allegations over forced labor of its supplier factories in the Uyghur region. Even if the IPO rumors were true and Shein wanted to list in the US, the company would need to clear the air about environmental, social, and governance concerns. There have been ill reports, including allegedly poor working conditions.

Many said the Chinese company was violating labor laws and slaving away employees. An investigation found that employees in some Shein partner factories worked 12 to 14 hours daily with only 24 hours off every month. Meanwhile, Chinese labor laws say workweeks cannot be more than 40 hours, and overtime should not exceed 36 hours monthly. Also, workers are entitled to one day off every week under the law.

However, a Shein representative told CNBC in May: