Shein is reportedly considering compensating some of its late-stage investors, before pursuing a Hong Kong flotation at a substantially reduced valuation.

It could offer investors a combination of cash payments and additional Class B shares, according to Bloomberg News, as it aims to lower their effective investment costs ahead of the proposed listing.

The measures would apply to backers that participated in Shein’s pre-Series D, Series D and Series D+ funding rounds.

The reset would align the investors’ cost base with a valuation of around £29.7bn, which is understood to be at the lower end of Shein’s anticipated IPO valuation.

Discussions remain ongoing and no final decision has been made. The amount of cash and shares offered would depend on the valuation secured through the Hong Kong listing.

The potential investor support comes after the retailer reported a £73.4m net loss for the first quarter of 2026, compared with a £292.9m profit during the same period last year.

The loss was partly driven by a fair-value charge linked to convertible investor shares, alongside weaker US sales following the removal of the country’s duty exemption for low-value imported parcels.

Shein’s US revenue fell 14.3 per cent to $2.04bn during the quarter, as increased tariffs and taxes raised costs in what has historically been the its largest market.

The ecommerce giant secured approval from China’s securities regulator for its Hong Kong listing on 10 July, after earlier attempts to float in New York and London failed to progress.

However, it has yet to disclose the size, pricing or timetable of the proposed share sale.

Shein is understood to be targeting a valuation of between $40bn and $50bn, well below the reported $100bn value it achieved during a funding round in 2022.

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