The Chinese fashion star has $100 billion to spin

A Chinese model poses at a fashion show during the Beijing International Fashion Week in the Chinese capital March 28, 2005. The fashion week highlights the work of Chinese designers as Beijing tries to impersonate a major international fashion center. REUTERS/Jason Lee ALF/JJ – RP6DRMVHPOAB

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HONG KONG, April 4 (Reuters Breakingviews) – Chinese fast fashion phenom Shein may hit its $100 billion valuation. The secretive e-commerce company plans to raise $1 billion in funding that could value it more than Zara owner Inditex (ITX.MC) and Swedish rival H&M (HMb.ST) combined, per Bloomberg. It doesn’t need to be exaggerated.

Thanks to its U.S. import tax exemptions, founder Chris Xu’s experience in online marketing and data, and proximity to Chinese apparel factories, the digital-only retailer has surpassed Amazon (AMZN.O) as the top US shopping app last year. A dress on Shein sells for 30% less than on Zara, Euromonitor estimates.

Shein was last valued at $50 billion in early 2021; that same year, revenue jumped 57% to $15.7 billion, Reuters reported More. Assuming it can maintain the same pace this year, the 12-figure price implies an enterprise value of 4 times sales. That’s above Uniqlo’s Japanese owner Fast Retailing (9983.T), which trades just 2.5x. But the latter’s revenue is expected to grow about 6% in the fiscal year ending in August, according to Refinitiv forecasts. Shein’s sizable premium hinges on convincing investors of his growth prospects. (By Robyn Mak)

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Editing by Antony Currie and Katrina Hamlin

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