Your MoneyStocktake

Shein IPO points to improved market sentiment

Despite controversy, Chinese fast-fashion giant will be seen as sign of renewed optimism in stocks

China-founded fast-fashion giant Shein is reportedly planning an initial public offering (IPO) that would value the company at $90 billion (€82.7 billion).

A Shein IPO would be controversial. Shein’s Chinese ties are a hot topic in the US. It has been accused of using forced labour to make its low-priced clothes; of 75-hour work shifts with few breaks; of poor environmental practices; and of copyright violations.

ESG (environmental, social, and corporate governance) investors may not be queuing up, but Wall Street will view Shein’s interest as another sign of improved market sentiment. US IPOs have raised just $23.6 billion in 2023, compared to $300 billion in 2021, when the market was at its peak, but there are signs of an upturn. UK chip designer Arm Holdings and German sandal maker Birkenstock had difficult US market debuts recently, but are now trading above their IPO prices, while website Reddit is reportedly eyeing a $15 billion IPO.

With US markets on the verge of all-time highs, a resurgence in IPO activity is surely a case of when, not if.