Fast fashion giant Shein has reported a significant drop in profits, adding further uncertainty to its highly anticipated flotation on the London Stock Exchange.
According to a report by the Financial Times, Shein’s net profit plummeted by nearly 40% to £789 million ($1 billion) in 2024, following a challenging final quarter and intensifying competition from rival Temu. While the company’s sales increased by 19% to £30 billion ($38 billion), the figures fell short of initial projections provided to investors in early 2023, which anticipated £3.8 billion ($4.8 billion) in net profit and £42.6 billion ($45 billion) in sales.
IPO Delays and Valuation Cuts
Shein confidentially filed for a listing on the London Stock Exchange in June 2024 but has faced multiple regulatory hurdles in both the UK and China. Reports last week suggested that the retailer might have to slash its valuation again to approximately £23.83 billion ($30 billion), down from a previous estimate of £50 billion. If accurate, this would significantly diminish the scale of what was once poised to be London’s largest-ever flotation.
In addition to regulatory delays, Shein has reportedly pushed back its IPO plans from as early as Easter 2025 to the second half of the year. The postponement follows recent changes to import tariffs in the United States, a key market for the retailer.
Rising Tariffs and Supply Chain Adjustments
At the beginning of February, the Trump administration announced the removal of the “de minimis” duty exemption, which previously allowed low-cost imports to enter the US without tariffs. The new policy, coupled with an additional 10% tariff on all Chinese goods, threatens to disrupt Shein’s business model, which has relied on cost-effective global shipping.
In response, the retailer is reportedly expanding its production base in Vietnam to mitigate the impact of rising US tariffs on its supply chain. This strategic shift underscores Shein’s efforts to maintain its competitive pricing despite growing trade restrictions.
As Shein navigates these mounting challenges, UK investors and suppliers will be closely watching its next moves—particularly in the lead-up to its long-awaited stock market debut.