Shein annual profits decline, further challenging London IPO

Shein’s profits dropped by more than a third last year, adding to its challenges ahead of a London stock market listing.

The company's net profit declined by almost 40% to £789 million ($1 billion) in 2024, after a challenging final quarter and rising competition from rival Temu, according to The Financial Times.

Annual sales jumped 19% to £30 billion ($38 billion), but were much lower than its initial projections of £42.6 billion ($45 billion) in sales and £3.8 billion ($4.8 billion) in net profit that the business had previously informed investors in early 2023.

The news comes as the global e-commerce giant faces ongoing challenges in making its stock market debut.

Last week, Shein was said to be under pressure to cut the valuation of its planned London stock market listing further. Investors were reportedly pressuring the company to reduce its valuation to around $30 billion (£23.8 billion) from its previously estimated £50 billion, which would have made it London’s biggest ever flotation.

The fresh reports suggested that investors believe an adjustment is needed to help get its potential initial public offering in the UK over the line.

Shein, which was founded in China but is now based in Singapore, has seen efforts to float face a variety of obstacles, including political pressure in the UK over alleged supply chain and labour abuses.

Current efforts to list the company now face further challenges from US President Donald Trump’s administration.

The reported reduction in valuation was largely linked to Trump’s crackdown on tariff-free imports of small goods from China.

The administration is planning to scrap the de minimis rule, which means goods under $800 (£635) in value are exempt from tariffs, and would introduce an additional 10% tariff on all goods from China.

Shein and rivals including Temu have allegedly benefitted from transporting products in small packages in order to avoid significant taxes.