Shein Group Ltd. is under pressure to cut its valuation to about $30 billion as it prepares to go public, Bloomberg News reported this week. That would still overprice the fast-fashion retailer caught in the crosshairs of US President Donald Trump’s trade war.
Bloomberg
Shein has been looking to list for at least the past year or so. With London increasingly losing out to New York when it comes to initial public offerings, British authorities have been keen to woo the seller of $15 dresses and $2 glass drinking straws. Around six months ago, a valuation of about $60 billion was said to have been targeted. Shein shareholders are suggesting the company lower its sights to get its offering away, according to Bloomberg. Assuming the $30 billion is equity, this would be a more realistic target — but it might still prove punchy given the considerable uncertainties around Shein’s business in the US, its biggest market.
Shein made more than $2 billion of net income in 2023, according to the Financial Times, surpassing $700 million in 2022 and $1.1 billion in 2021. Assuming it added another $1 billion last year, and perhaps $500 million this year — although this could prove optimistic — then it would trade on a price-to-earnings ratio below 10 times. That would be a steep discount to Zara owner Inditex SA’s near 30 times ratio.
This valuation looks much more sensible, given the risks to Shein’s growth. But this discount may still not be enough for Shein to tempt investors; even putting aside the environmental, social and governance risks, there’s the perennial question of what they would be buying shares in.
Shein is headquartered in Singapore, but the ultimate controlling party is registered in the Cayman Islands. It, of course, owns its brand, which has become extremely well known, thanks to all those Shein Haul videos on TikTok. But its main business is operating an e-commerce platform that reacts to the looks on social media in real time, with these garments supplied by a network of about 5,000 factories, mostly in China, none of which it owns.
Trump has added another layer of uncertainty. Earlier this month, the US president imposed an additional 10% tariff on products made in China. Shein has already been diversifying its manufacturing base, expanding in Brazil, for example, where it was supplied by 100 factories in 2023 and is planning to eventually expand this to 2,000. The company is asking some of its top suppliers in China to set up new production facilities in Vietnam, Bloomberg News reported.
Another feature of Shein’s business is that it ships direct to western countries from China in smaller package sizes, rather than holding inventory in warehouses closer to shoppers. That’s allowed it to take advantage of the so-called “de minimis” rule whereby customers can receive parcels without paying import duties. Trump announced that that the exemption would be scrapped, but then temporarily paused measures to crack down on the loophole after packages piled up at the border.
Shein has been building distribution infrastructure outside of China, for example in Indiana and Southern California in the US, as well as Canada, Poland, Italy and the United Arab Emirates. It could continue this expansion by adding more warehouse capacity in the US.
But the prospect of higher tariffs, as well as extra costs from operating more extensive logistics facilities, would make it more like a traditional retailer, and less like a nimble upstart offering rock-bottom prices. A $20 dress previously shipped duty free to a US customer could increase to between $25.80 and $27.40, Bloomberg Intelligence estimates. If this were the case, it would be competing more closely with the likes of Associated British Foods Plc’s Primark, which is expanding in the US, as well as Gap Inc.’s Old Navy, Walmart Inc. and Target Corp., as well as the dollar stores such as Dollar Tree Inc. and Dollar General Corp.
Already the noise around tariffs and import taxes is taking its toll on Shein’s US sales growth, which slowed in early February, before recovering after the abolition of the de minimis rule was delayed, according to data from Bloomberg. This could reflect a post-holiday season slowdown across the retail sector; but it’s still concerning.
Shein executives have sought to reassure shareholders about the potential impact of the US’s punitive moves. The company’s head of strategic and corporate affairs in North America told the Retail Week and The Grocer conference recently that the company’s cheap prices didn’t rely on customs policies. Executive Chairman Donald Tang said in a letter to investors that growth remains strong, Reuters reported. He added that he had long supported the ending of the de minimis rule. Still, any IPO is likely to be delayed until the second half of the year, the Financial Times reported. That would give the company time to adjust its supply chain to cope with the impact of higher tariffs and import duties.
Compared with where the price chatter started, and where Inditex trades, the latest number doing the rounds might seem like a bargain. But given the risks to the business, this still isn’t as cheap as one of Shein’s summer dresses.
On Friday, guests at a millinery in central London tried on hats of various shapes and sizes. Some leant in to smell a chocolate design, while others admired one infused with the scent of autumn.
A tempered chocolate hat on display as milliner Stephen Jones showcases his Autumn/Winter 2025-2026 collection at his Covent Garden shop during London Fashion Week, 21 February 2025. – Photo credit: AFP
Legendary British milliner Stephen Jones brought sensory experiences to his Autumn/Winter 2025 presentation at London Fashion Week, showcasing hats crafted from satin, tartan, crêpe, and even glass. “I was thinking about how people connected through hats, and so it’s about sight, and taste, and touch,” Jones, who also designs hats for Dior, told AFP at his studio in Covent Garden.
Feathers floated atop a delicate fascinator, icy beads dangled down from another headband, and Jones described a black satin flat cap with white piping as “assured” and “fun.”
“What is fashion about? Is fashion a uniform? Is fashion self-expression? Can fashion be fun? So that’s why this collection came about,” Jones said.
In the background, one guest tried on a hat with gauzy petals piled high, exclaiming, “It’s so strange; when I take the hat off, I feel naked.” The centre of attraction was a Willy Wonka-esque top hat made of chocolate with a bite-size hole in its crown, which Jones crafted in collaboration with Paris-based pâtisserie Jana Lai.
Jones has already received an order for the hat from a “lady who wants to wear it for her birthday party” and said the confectionary head covering can be worn by “anyone.”
“Not somewhere too hot, though”, he mused.
Celebrating life
From plush berets for Princess Diana to towering headdresses strutted down Dior runways, Jones’s hats have served as the crowning glory of celebrities and designers for over four decades.
His work is currently on display in a retrospective at Paris’s Palais Galliera called “Stephen Jones, Chapeaux d’Artiste”, which brings together some 170 hats spanning his career.
Jones, 67, was born “near Liverpool, in the middle of nowhere”.
“So, for me, Paris was always such an exciting place,” said Jones, who divides his time between London and Paris.
“Paris has always influenced my work,” he added, a customary brown beret balancing on his head.
Jones crafted his first hat when he was a student at London’s Central Saint Martins out of a cereal box and scraps from his sister’s blouse. That sense of whimsy and innovation never really went away.
“Everything else can be super serious, but fashion and hats need to be about celebrating life,” he said. “Especially at the moment.” For the millinery guru, participating in fashion week during a time of global political uncertainty was “strange.” “But that’s what fashion does. At least you can control how you get dressed in the morning.”
“Hats are so popular because they’re like a talisman of something. It’s a talisman of hope,” said Jones. “People wear jackets and tailoring and shoes… But to show your individuality, maybe a hat is a very good way of doing that.”
Despite dressing a roster of fashion royalty, Jones said he still has not made a hat for Britain’s Queen Camilla. “The Queen hasn’t worn my hats yet. Maybe one day I’ll make a hat (for her),” said Jones.
After 45 years of presenting collections, how does he keep pulling ideas out of his hat?
“I guess that’s my character. I live my life and put it into a hat.”
There’s no such thing as consistency when it comes to consumer confidence, at the moment at least, as trying to read consumer emotions in February is a little tough.
Photo: Pexels
GfK has its long-running Consumer Confidence Index increasing two points to -20 this month and its other measures to gauge sentiment were also all up on January.
This is in stark contrast to yesterday’s (20 February) data from the British Retail Consortium which showed confidence down three points February from January, the fifth consecutive month in which expectations have worsened.
The GfK index measuring changes in personal finances during the last year is up three points at -7; seven points better than February 2024 and the forecast for personal finances over the next 12 months is up four points at +2, which is two points better than this time last year. But according to the BRC it had its consumer personal financial situation falling 7 points from January.
GfK’s measure for the general economic situation of the country during the last 12 months is also up two points to -44, one point lower than in February 2024 and expectations for the general economic situation over the next 12 months have improved three points to -31, still seven points worse than February 2024.
The Major Purchase Index is also up three points to -17, eight points better than this month last year, while The Savings Index stayed at +30 in February, one point higher than this time last year.
Neil Bellamy, Consumer Insights Director, NIQ GfK, said it its reading: “The biggest improvement is in how consumers see their personal finances for the coming year with an increase of four points that takes this measure out of negative territory to +2.
“The Bank of England interest rate cut on 6 February will have brightened the mood for some people, but the majority are still struggling with a cost-of-living crisis that is far from over. Prices are still rising above the Bank of England’s target; gas and electricity bills remain a challenge for many households. So it’s no surprise that consumer views on the general economic situation are still lower than 12 months ago, suggesting that people don’t expect the economy to show any dramatic signs of improvement soon. Politicians looking for bright spots on the horizon will be disappointed.”
Interestingly, with the survey coming on the day that the UK’s statistics body said January retail sales volumes rose, home delivery expert Parcelhero said that “shoppers may say they are worried about the state of the economy, but that didn’t stop them splashing out at the supermarket”.
Its head of Consumer Research, David Jinks, said consumers might not actually be feeling as bad as they think they are.
“When it came to actually spending money, it seems that they actually splashed the cash more in January than at any time in the last few months,” he said.
It will be interesting to see how both the retail sales picture and the consumer confidence picture develop in the months ahead.
The Perfume Shop and Deliveroo are extending their retail partnership to cover further UK locations, following a successful launch period last year.
The widening of its association, launched last year as Eau De-Liveroo x The Perfume Shop, comes as research reveals 47% of Britons have forgotten to wear or pack their favourite perfume when heading out, “leaving them feeling annoyed (24%), or unprepared (18%)”.
During peak periods, the retailer said the partnership managed to directly generate in-store sales in 21 locations covering London, Manchester, Bristol, Birmingham, Leeds, Glasgow and Edinburgh. “With over 1,000 perfumes available for quick delivery, the partnership has proven particularly popular during key shopping seasons over Black Friday and throughout December”, it added.
Milton Keynes was the most recent to introduce the Deliveroo app service, and there are plans to continue rolling out additional locations over 2025.
Gill Smith, managing director at The Perfume Shop said: “The success of our partnership… is a testament to the growing demand for seamless, on-demand shopping experiences”
Suzy McClintock, VP for New Verticals at Deliveroo added: “This successful partnership has not only driven sales but is also helping reshape the way customers shop by offering fast, on-demand delivery of over 1,000 fragrances across the UK.
Deliveroo is also continuing to expand its partnership to other retailers including Hurr, Accessorize, Hemp and Boots.
Entertainment8 years ago