Shein, the fast-fashion retailer, is set to introduce its inaugural branded credit card globally.
- This move comes as Shein’s sales growth has notably decelerated to 23% in the first half of the year.
- In collaboration with Mexican fintech Stori, the card offers points on purchases and additional incentives for clothing orders.
- Shein’s profits have seen a significant decline, dropping over 70% to approximately £308 million.
- The company is reportedly gearing up for an IPO on the London Stock Exchange, having appointed several leading financial institutions.
Shein, recognised as a leading entity in the fast fashion domain, is preparing to launch its first branded credit card on a global scale. This strategic initiative is anticipated to bolster its international expansion efforts. Collaborating with Mexican fintech firm, Stori, Shein aims to enhance consumer engagement by offering points for every purchase and doubling the points awarded for clothing orders, as reported by Reuters.
The timing of this development coincides with a perceptible slowdown in Shein’s sales growth, which has decreased to 23% for the initial half of this year. This is a marked reduction compared to the impressive 40% growth recorded in the preceding year. The decline in growth underscores potential challenges Shein faces within the highly competitive fast fashion industry, especially as it braces for a possible initial public offering.
Financially, Shein has encountered a significant contraction in its profit margins. Reports indicate a precipitous drop of over 70% in profits, which have fallen to just below £308 million. Despite sales reaching over £13.8 billion, the downturn in profit highlights pressing financial stresses, inviting scrutiny on its operational efficiencies and strategic decision-making processes.
In response to these fiscal challenges, and in preparation for a speculated IPO, Shein has initiated informal meetings with investors. The company has appointed Barclays Plc and UBS Group AG as bookrunners, complemented by strategic partnerships with Goldman Sachs Group Inc, JPMorgan Chase & Co, and Morgan Stanley. These partnerships are crucial as Shein navigates the intricate preparations required for a public offering, likely targeting the London Stock Exchange.
Shein’s ambitious credit card launch and IPO preparation signal its intent to strengthen market position amidst fiscal challenges and a competitive landscape.
