NRF rejects Shein membership as retailer pursues U.S. IPO

Chinese-founded fast fashion behemoth Shein isn’t just working to win over lawmakers in Washington, D.C., as it gears up for a potential U.S. IPO, it’s also trying to win over the broader U.S. retail industry.

It’ll have to go through the National Retail Federation first. 

Shein, which filed to go public in the U.S. late last year, has tried to become a member of the retail industry’s largest and most powerful trade association but has been repeatedly rejected, people familiar with the matter told CNBC. The people spoke on the condition of anonymity because the talks are private. 

For most companies, becoming a member of the NRF wouldn’t have a major impact on their business. The organization is the retail industry’s primary lobbying machine in Washington, D.C., and provides access to NRF events and research on market trends, among other benefits.

But Shein is in the midst of a charm offensive. It has been working to convince lawmakers that it can be trusted as a public company listed on American exchanges despite concerns over its ties to China, its supply chain and its use of a trade law loophole.

Shein is also caught in the middle of a complex geopolitical rivalry between the U.S. and Beijing and has been targeted by lawmakers who are concerned the company shares data on American consumers with the Chinese government and produces goods made with forced labor. The intense scrutiny Shein has faced reportedly pushed the retailer to consider going public in London instead of the U.S.

Shein was recently valued at $66 billion, CNBC previously reported, and is poised to be one of the biggest listings of the year. It pulls in revenue well above $30 billion a year, according to a key retail partner. Its rise has eaten into the market share of a host of U.S.-based rivals including Gap Inc., TJX Companies and Macy’s, and has challenged mass-market players like Target, Walmart and Amazon.

If Shein can earn a stamp of approval from the de facto voice of the retail industry, which is led by the largest retailers and tech companies on the planet, it could help legitimize Shein in the eyes of federal lawmakers. It could also smooth over what’s been an otherwise bumpy path to a U.S. initial public offering. 

“That definitely would put a little bit more pressure on the politicians to accept the company, right? Simply because the peers recognize the company and they think that it is a worthy competitor. … That would definitely create a little bit more legitimacy,” said Wharton School professor John Zhang, founding director of the Penn Wharton China Center. “Most importantly, I think that [NRF membership] really creates the perception amongst the investors that this is just one of the normal retailers.” 

Steve…