Chinese fast-fashion retailer SHEIN, which was valued at more than $100 billion earlier this year, has lost up to a third of its value in private markets in recent months, the Financial Times reported, citing people familiar with the matter.
SHEIN is valued in the private market at $65 billion to $85 billion, according to three people familiar with the matter. Venture capital and private equity funds are trying to liquidate capital in the wake of the global stock market rout, which has particularly affected technology companies. Shares worth about $200m were sold at a valuation of $70bn.
SHEIN was valued at just over $100 billion in a funding round in April, making it the third most valuable private company in the world behind ByteDance and SpaceX. Just two years ago, the company was valued at $15bn.
An acquaintance of the company’s management said SHEIN had attracted investors because it was seen as immune to the regulatory pressures of Chinese ecommerce platforms. Because SHEIN’s customer base is abroad, the company does not face the same scrutiny over data and consumer protection issues as Alibaba and JD.com, they said.
A spokesman for SHEIN said: “Since April, the company has not authorised the inclusion of any secondary market transactions that require the company’s prior approval.”
Part of the reason for SHEIN’s decline is that the Federal Reserve’s policy of raising interest rates to curb fast-rising inflation has increased expectations of a U.S. recession.
Several global venture capitalists suffered big losses after making large capital injections into SHEIN in 2021 at sky-high valuations.
One Hong Kong-based investment banker said SHEIN had come under selling pressure as funds tried to reduce their ownership concentration.
Fast-fashion retailers such as SHEIN face high inflation and weak consumer confidence this year, and rising raw material prices and transportation costs will also eat into the industry’s thin margins, according to a retail analyst at a major Wall Street bank.
Post time: Oct-10-2022