Fast-fashion giant Shein is shifting its focus towards a potential London listing after facing regulatory obstacles and criticism from US legislators during its attempt to float in New York. According to two individuals familiar with the matter, the online fashion retailer intends to update China’s securities regulator regarding the change in initial public offering (IPO) location and submit an application to the London Stock Exchange (LSE) as early as this month. Shein, which was valued at $66bn in a previous funding round, has already been consulting with the London-based financial and legal advisory teams since the beginning of 2022, while also meeting with London-based investment managers prior to the intended float. Shein and the LSE declined to comment, and the China Securities Regulatory Commission (CSRC) did not respond to requests for comment.
Despite continuing to pursue a US listing, Shein has been experiencing difficulties in both the US and China, with accusations from US politicians over supposed labour violations and legal actions against the firm from rivals. Earlier this year, the CSRC reportedly advised Shein against pursuing a US IPO due to concerns regarding its supply chain. Nonetheless, Shein still intends to maintain its SEC filing in the event that the stance of US regulators changes, and it might subsequently pursue a secondary US listing in New York once it thinks the US political environment is favourable enough.
In February, Republican senator Marco Rubio petitioned the Securities and Exchange Commission (SEC) to prevent Shein from listing publicly in New York unless the business provides further details about its operations and the “serious hazards” of functioning in China. The SEC has yet to advance Shein’s IPO submission, according to two sources.
If Shein proceeds with the planned IPO, it could become one of the biggest global offerings of the year. For London, this would represent a significant shift, as companies like British semiconductor designer Arm have opted to list in New York instead to take advantage of larger investor pools. As of May 2022, there had been only four UK IPOs out of approximately 30 European-based IPOs so far this year. Sky News announced in December that Shein’s chairman, Donald Tang, visited London to meet representatives from the stock exchange and other significant economic figures.
(Reporting by Julie Zhu, Kane Wu, and Greg Roumeliotis; Additional reporting by Helen Reid; Editing by Sumeet Chatterjee and Jan Harvey)
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