Shein Said to Revive Plan for New York Listing in 2022, Founder Considering Ways to Bypass Offshore IPO Rules


Chinese fashion retailer Sheen is reviving plans to list in New York this year and its founders are considering a citizenship change to bypass proposed tougher regulations for offshore IPOs in China, two people familiar with the matter said. .

It wasn’t immediately clear how much the company was looking to raise from its New York debut.

The initial public offering (IPO), if finalized, would be the first major equity deal by a Chinese company in the United States, as regulators in the world’s second-largest economy in July tightened monitoring of such listings. had stepped for.

she inFounded in 2008 by Chinese entrepreneur Chris Xu, it first began preparations for a US IPO about two years ago, but partially postponed plans due to unpredictable markets amid rising US-China tensions, sources said.

Both the sources declined to be named because the plans are confidential. Sheen’s spokesperson said the company has no plans to go public.

The Nanjing-based company is one of the largest online fashion marketplaces in the world targeting overseas consumers. The United States is its largest market.

The sources said Xu, the founder of Xen, was eyeing a Singaporean citizenship partly to circumvent China’s new and stricter rules on foreign listings. He added that if the application for change of citizenship is made and successful, the path to an offshore IPO will become easier.

“Neither Xu nor Sheen’s other officials have applied for Singaporean citizenship,” a company spokesperson said. Xu did not respond to Reuters questions sent through this spokesperson.

New rules issued by China’s Cyberspace Administration and offshore listing filing arrangements to be finalized by China’s securities regulator are set to make the US listing process for Chinese firms more complicated, if not longer. .

The securities regulator’s draft rules for offshore listings target companies where the majority of senior management is either Chinese citizens or residing in China, or whose core business activities are conducted in China.

evaluation jump

According to its website, Sheen ships from its multiple global warehouses to 150 countries and territories.

A source and another person with knowledge of the matter said it made around 100 billion (about Rs 1,18,170 crore) in revenue in 2021, taking advantage of the pandemic that has shifted global consumption online. He said that its valuation at the beginning of 2021 was around $ 50 billion (about Rs 3,73,990 crore).

One of the first two sources said valuations are projected to double in the past year.

According to data from CB Insights, the company, whose investors include Sequoia Capital China, IDG Capital and Tiger Global, was valued at $15 billion (about Rs 1,12,200 crore) in its last funding round in August 2020.

According to CoreSight Research, Sheen’s projected sales in 2020 grew by 250 percent over the previous year to $10 billion (about Rs 74,800 crore), with over 2,000 items added weekly.

Sheen’s spokesperson said that as a private company, it did not disclose financial data.

Sheen has hired Bank of America, Goldman Sachs and JPMorgan to work on the IPO, said a source with knowledge of the company’s valuation and another person familiar with the matter.

© Thomson Reuters 2022