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Shein: Go Big or Go Home

The economics of Shein
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     SHEIN, a widely recognized player in the fashion retail industry, has reportedly taken the initial steps toward becoming a publicly traded company in the United States. While the specifics of this transition remain undisclosed, a recent Reuters report suggests that SHEIN is gearing up for the process, with the anticipated timeline set for 2024.

     An IPO (Initial Public Offering) marks the transformative journey of a private corporation into a public entity, allowing the public to buy its shares for the first time. Private enterprises usually secure funding from a select group of investors, often the founders, their close associates, or affluent professionals. Conversely, a public company opens its doors to investment from the broader public.

     Embarking on an IPO typically indicates a company’s aspirations for growth, leveraging the influx of capital raised by offering shares to the public. This capital infusion is commonly earmarked for improving existing services, expanding operations, and potentially creating new employment opportunities. In the case of SHEIN, should the IPO proceed, it is poised to make a positive economic impact akin to other companies navigating this transformative phase.

     Despite being a well-established and prosperous company valued at over $60 billion, SHEIN has not been immune to controversies. Known for its competitive edge through low pricing and a diverse product range, it has captured a significant share of the fast-fashion market, putting it in direct competition with major industry players. However, SHEIN has faced criticism for its adherence to the fast-fashion business model, accused of overproduction leading to environmental concerns and reported poor working conditions.

     As SHEIN sets its sights on the US stock market, it encounters hurdles. Concerns surrounding labor practices have prompted calls for meticulous examination by the US Securities and Exchange Commission (SEC). Additionally, since SHEIN primarily operates in China, securing approval from the China Securities Regulatory Commission (CSRC) is an essential prerequisite, introducing an additional layer of intricacy to the transition.

    While the prospect of an IPO promises an expanded array of clothing choices and increased production under SHEIN’s established fast-fashion model, the company’s trajectory is subject to scrutiny and public sentiment. As it confronts allegations related to labor practices and environmental impact, the outcome of its transition remains uncertain, with the fulfillment of consumer expectations hinging on the response from regulators and the public alike.

 

Sources:

-[Reuters](https://www.reuters.com/markets/deals/chinese-fast-fashion-shein-files-us-ipo-wsj-2023-11-27/

– [Investopedia](https://www.investopedia.com/terms/i/ipo.asp

– [Business Insider] (https://www.businessinsider.com/what-is-shein-billion-dollar-fast-fashion-company-explained-2023-7)

– [Wall Paper Journal] (https://www.youtube.com/watch?v=gWotBPtsulo)



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Aditi Goyal, Staff Writer
As an 8th grader that loves Taylor Swift, reading, and art, I see this as an absolute win. I live by the Taylor Swift lyric, "hold onto the memories, they will hold on to you."
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