Report: Shein Raises $2 Billion but Slashes Valuation by 1/3

Shein’s latest funding round has reportedly lowered its $100 billion valuation by a third.

The online-only fashion retailer raised $2 billion in the most recent round, and slashed its valuation to $66 billion amid a drop in share prices for tech companies, The Wall Street Journal reported Wednesday (May 17), citing unnamed sources.

Reached by PYMNTS, Shein declined to comment.

The news follows reports from January that Shein was planning a $3 billion funding round that would lower its valuation to $64 billion.

As PYMNTS noted at the time, the 10 top tech stocks lost a combined $4.6 trillion in market capitalization last year in the wake of delays in spending by consumers, supply chain holdups, China’s struggles with COVID-19, job cuts and a constant torrent of bad news that affected market confidence.

The WSJ report, again citing people with knowledge of the matter, said Shein generated $23 billion in revenue in 2022, placing it close to rivals like H&M and Inditex, while its net profit reached $800 million. These sources say Shein aims to increase revenues by 40% this year.

However, the report also notes that Shein, now based in Singapore but founded in China, is facing pressure from the U.S. government over its labor and environmental record.

Last month, PYMNTS looked at the company’s entry into the world of “quiet luxury,” a term that applies to “subtle but expensive garments” typically associated with high-end brands meant to convey an under-the-radar feeling of refinement.

“While Shein may not seem like an obvious fit for the understated look of quiet luxury, it’s not uncommon for fast-fashion retailers to try their hand at different styles and trends to appeal to a wide range of customers,” the report said.

“In this case, Shein can offer refined pieces — think blazers and high-quality denim — into its collections at a lower price point to help consumers create the old money look they’re after.”

Elsewhere in the fast fashion space, PYMNTS wrote earlier this week about this history of retailers in the sector working with luxury brands to bridge “the gap between high-end fashion and affordable clothing.”

In this case, that means a collaboration between H&M and luxury brand Mugler, announced in March, offering “pieces that bear a striking resemblance to those available under the Mugler brand at a premium price point.”

As that report notes, it’s a timely sort of partnership, given the number of consumers who are cutting back on discretionary spending due to ongoing inflation.

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