Weekly News Wrap: Freshippo seeks lower funds at $6b valuation; Uniqlo owner's performance to hint China's recovery prospects

And Shein seeks an IPO in the United States as soon as 2024.

From Reuters:

Alibaba's supermarket chain Freshippo is seeking to raise funds at a valuation of about $6b, much lower than a hoped-for valuation of up to $10b earlier this year, three people familiar with the matter told Reuters.

The company had to cut its valuation expectations after China's COVID-19 restrictions, in particular a draconian lockdown in the economic hub of Shanghai, badly dented business, they said.

Investors are also sceptical about whether loss-making Freshippo can keep growing and turn a profit anytime soon given the company's bleak outlook as China continues to pursue a strict policy of stamping out COVID-19 cases, said two of the people.

The supermarket chain, known as Hema in Chinese, is aiming to raise $400m to $500m from outside investors, two of the sources said.

The fundraising is far from being finalised and financial terms could change, cautioned two of the people and a separate fourth source with knowledge of the matter.

READ MORE: Alibaba retains post as Asia’s top retailer in 2021

From Reuters:

Japan's Fast Retailing, home of Uniqlo, is expected to report quarterly profit grew 11% overall on Thursday, but investors' focus will be on whether China is recovering and how domestic consumers are faring with inflation and the weak yen.

A bellwether for global retailers operating in China, Fast Retailing previously warned of a sharp decline in profit this year from its nearly 900 stores in the world's second-largest economy. Still, it raised overall sales and profit forecasts to reflect strong demand in North America and Europe.

The company is expected to post an operating profit of $487m (JPY66.72b) for Q3 through May, based on an average of seven analysts' forecasts from Refinitiv.

For the year ending August, the company expects earnings to climb 8.4% to $1.95b (JPY270b).

From CNBC:

Chinese fast-fashion giant Shein hopes to do an initial public offering (IPO) in the United States as soon as 2024, Bloomberg reported, citing people familiar with the matter.

Yet it faces environmental, social and governance, or ESG, concerns that could be an obstacle to an IPO, according to the report. Previously, Shein had sought a 2022 IPO in the US, according to Reuters.

Shein, which has a $100b valuation, has drawn scrutiny for its cheap product line that has been built on a fast and prolific production chain. A probe by Swiss watchdog group Public Eye said some of Shein’s manufacturers have been subjecting employees to dangerous conditions and 75-hour workweeks.