Shein is reportedly considering a funding round that would lower its market valuation by a third.
The Financial Times (FT) reported Wednesday (Jan. 18) that the deal to raise $3 billion would cut the online, fast-fashion retailer’s market cap to $64 billion after it was valued at $100 billion in an April funding round.
Reached for comment on the report, a Shein spokesperson said, “Shein denies the accuracy of some of the information.” They did not specify the information.
The firm’s reported talks come at a time when the market valuations of tech stocks have been plummeting.
The 10 top tech stocks lost a combined $4.6 trillion in market capitalization in 2022 as the market was impacted by delays in spending by consumers, supply chain issues, China’s challenges with COVID-19, job cuts and a continuous stream of bad news that affected market confidence.
Three days into the new year, Apple’s market cap dropped below $2 trillion after becoming the first firm to reach $3 trillion landmark 12 months earlier.
In addition, the connected economy and tech stocks tracked in PYMNTS’ CE 100 Index suffered a “terrible 2022” and the index was down 35.7% for the year.
Shein is expected to close the new fundraising round within months, according to the Wednesday report by the FT, which cited unnamed sources.
The firm also plans to launch an initial public offering (IPO) in the United States — perhaps as early as this year — the report said.
Shein also plans to expand into payments, per the report.
Rival fast fashion firm H&M has been struggling recently. When the firm reported its sales figures Dec. 15, they were below what analysts had expected.
Two weeks before that, H&M announced that it would eliminate 1,500 jobs as part of a cost and efficiency program.
Another top player in the fast fashion sector, Zara owner Inditex, reported Dec. 14 that its sales were continuing to climb.
At the same time that growth was happening, the fast fashion space was becoming more and more crowded, with Shein reporting revenue that put it in competition with both Zara and H&M.
Shein itself has reportedly been looking to add merchandise and shipping options by shifting to a marketplace-style platform that would allow other retailers to sell products alongside Shein’s own branded offerings.