Shein, a prominent name in fast fashion, announces the launch of its first branded credit card globally.
- The credit card is introduced as Shein seeks to expand internationally and gear up for a possible IPO.
- Shein partners with fintech company Stori to offer incentives on purchases, particularly clothing.
- Sales growth for Shein has decelerated to 23% in the first half of this year.
- Shein’s profits have significantly declined, prompting strategic financial preparations.
Shein, a key player in the fast fashion industry, has unveiled plans to introduce its first branded credit card worldwide. This initiative is part of its broader strategy to strengthen its international presence and prepare for an initial public offering (IPO).
In collaboration with the Mexican financial technology firm Stori, Shein’s credit card will provide customers with reward points for every purchase made on its platform, with an additional emphasis on doubling points gained from clothing purchases. This move aims to enhance customer retention and increase sales volume.
Despite these strategic initiatives, Shein is experiencing a slowdown in sales growth. The rate of growth has decreased to 23% in the first half of the current year, a stark contrast to a 40% growth observed over the same period last year. This decline has raised some concerns within the company and among potential investors.
Adding to these challenges, Shein’s profitability has taken a substantial hit. Reports indicate a more than 70% plunge in profits, dropping to just below £308 million, despite sales reaching over £13.8 billion. These figures underscore the importance of Shein’s recent financial manoeuvres.
In light of these developments, Shein has been actively engaging with investors through informal meetings, a necessary step as it gears up for its proposed IPO on the London Stock Exchange. The company has already engaged several financial institutions including Barclays Plc and UBS Group AG as bookrunners, with additional collaboration from financial giants like Goldman Sachs Group Inc, JPMorgan Chase & Co, and Morgan Stanley.
Shein’s multifaceted approach reflects a robust attempt to navigate economic challenges and secure a strong position in the global market.
