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Shein’s profits fell by more than a third last year, exacerbating the challenge ahead of the long-term planned flotation that will be one of the biggest challenges on the London Stock Exchange this decade.
The Singapore-based group’s net profit shranked nearly 40% to $1 billion in 2024 as it suffered a tough final quarter and struggled with rival Temu.
Sales for the full year rose 19% to $38 billion, one of whom added that the numbers came from internal forecasts before the final account.
As a private company, Shein has not issued profit guidance, but the 2024 figures are well below the company’s projected $4.8 billion in net profit and $45 billion in sales in 2024, showing investors in early 2023 that this is the foot.
Shein did not respond to a request for comment.
The lower profit highlights Shein’s challenge as it tries to win approval from regulators listed in London and leads to geopolitical changes that put pressure on its valuation.
Shein’s latest funding in 2023 is worth $66 billion for its initial public offering in the first half of this year, according to two people familiar with the matter.
Shein ships cheap clothing from Chinese factories directly to shoppers around the world, according to people familiar with the matter.
But the IPO can now be pushed into the second half of this year, which is in the second half of the year after President Donald Trump decided to tighten the tax exemptions used when she sold it to U.S. customers.
Trump ended this month the De Minimis rule, which allows imports of parcels worth less than $800 without taking responsibility. He also hit Chinese goods with an additional 10% tariff.
The implementation of De Minimis Change has been put on hold, but analysts expect the items sold by Shein and Temu will drive their higher prices.
The delay in the IPO until the second half of this year will force the company to re-provid new documents with UK regulators.
Shein filed a confidential IPO instrument to UK regulators last year before introducing new UK listing rules. However, the transition period for completing the IPO process that begins before launching the new rules is scheduled to end in July.
Three senior UK corporate lawyers say that training will be a procedural step, but the company will miss the prospect of relying on its original documents highlighting how its listed efforts are delaying.
Shein launched its first plan to openly openly in New York at the end of 2023, but was hub after being rejected by the SEC. Its listing has become in trouble due to whether it will receive approval from regulators in London and Beijing.
Shein’s profit decline is a pattern of delivering cheap Chinese-made goods to overseas shoppers as Temu’s group battle race emerges. Temu won the victory of some of Shein’s suppliers in China, and competition has also driven Shein’s air freight costs and marketing expenses.
In the second half of 2023, Shein went beyond fashion by briefly responsive to Temu’s threat, after information reported previously eroded Shein’s profitability. Since then, Shein has refocused on its core business.
Shein has invested money in lobbying efforts from Washington to London’s western capital, including hiring Trump’s loyalist Kash Patel as a consultant to its parent company Elite Depot. Patel resigned as a consultant before his recent confirmation as a director of the FBI, but retained a stake in the company, which is worth $1 million to $5 million.
Other reports by Ivan Levingston
