Shein shares slide on fast-fashion retailer’s stock market debut

Shares of fast-fashion retailer Shein plummeted 10% in its debut on the Hong Kong stock exchange, as the company's valuation fell below $25bn. Founded by entrepreneur Chris Xu, Shein moved its headquarters to Singapore in early 2022 to avoid scrutiny over potential forced labor issues. Although the company initially priced shares at HK$48.56, valuing the business at $26bn, the stock subsequently declined after trading began.

Despite the initial slide, Shein's share price partially recovered, closing at HK$48.50, just 0.12% lower than the opening price. Concerns about Shein's supply chain and regulatory changes threatening its business model have contributed to the decline in its valuation, which was around $100bn in April 2022. The US removed its "de minimis" import duty exemption on small packages in May, impacting sales in the country, while the EU is also tightening regulations on small parcels imported from outside the trading bloc.

France recently imposed penalties on fast-fashion items to curb the surge in sales of cheap products sold by retailers like Shein. China's commerce ministry has criticized the French law as discriminatory and a trade barrier.