Shein Files For IPO: ByteDance Must Be Watching Closely

It looks like Congress and other regulators have just been put on a clock - Shein has filed confidentially for its IPO, likely in early 2024.

Here are the details:

• JP Morgan, Goldman Sachs, and Morgan Stanley are all lead underwriters on the offering.

• The company was last valued at $66 billion

Shein has done an excellent job weaving its way into joint ventures in the United States, which has set itself up for an IPO.

The Watson Weekend covered Shein in great detail just a couple of weeks ago, and I encourage you to check out that coverage below.

- Getting in bed with the top investment banks like Goldman and JP Morgan doesn't hurt.

- It's joint ventures with Forever21 and its parent company Sparc Group (owned by Authentic Brands).

- Starting re-entering the Indian market with a partnership and planning to diversify its manufacturing there and other places.

I have a few questions to consider in all this. First, who stands to win in this?

* First and foremost, Authentic Brands Group stands to win big, and on a relatively recent partnership. A lot depends on the valuation here.

* Other Chinese retailers may see this as paving a clearer path to the North American market. Bytedance is watching this very closely.

Second, what are the risks?

* Allowing a Chinese corporation that is effectively skirting US import law by staying under the deminimis is essentially unleveling the retail playing field. Without regulatory action, companies like Forever21 are forced to copy, partner, or die.

Deminimis is calculated on a per-parcel basis, not on an extended volume basis. In short, the laws never contemplated something as enormous and fast-growing as Shein.

Finally, what's the valuation?

* How do you even value a company like this and what institutions will be interested? Existential risks abound, but ultimately there is a lot of money to be made that the brakes will not be put on this listing by Wall Street -- instead, Washington DC would have to do something about this.

In an election year, whether that happens involves predicting which way the political winds are blowing more than anything. 🌨