Chinese fashion giant Shein targets London for record £50B IPO
What's the story
Chinese online fashion behemoth, Shein, is reportedly readying to file paperwork for the largest ever stock market flotation on the London Stock Exchange (LSE). This move follows unsuccessful attempts to list shares in the US due to political and regulatory concerns. The company is expected to confidentially file a prospectus with the Financial Conduct Authority as early as this week.
Political backing
UK political figures show support for Shein's potential listing
Shein's decision to opt for LSE was influenced by meetings with UK Chancellor Jeremy Hunt and Donald Tang, Shein's executive chair. Jonathan Reynolds (shadow business secretary), Sarah Jones (shadow minister for industry), and Chris Bryant (shadow minister for creative industries) also recently met with Tang to discuss the potential listing. Sources suggest that if Labour comes into power in July, it would be supportive of Shein floating in the UK.
Business success
Shein's rapid growth and profitable performance
Launched in Nanjing, China in 2012, Shein has quickly become one of the world's largest fashion retailers due to its low prices and high-volume sales. Despite being headquartered in Singapore and having most of its suppliers based in China, Shein does not sell products to China. The company posted profits exceeding $2 billion in 2023, nearly double its $1.1 billion earnings in 2021.
Addressing concerns
Shein responds to concerns over labour conditions
Senior politicians, including three parliamentary committee chairs, have raised concerns about labour conditions within Shein's supply chains. In response, Shein stated it took visibility across its supply chain seriously, had "zero-tolerance to forced labour," and was committed to human rights. The company's stance on these issues could play a significant role in the success of its potential listing on the LSE.
Market impact
Shein's listing could revitalize London Stock Exchange
A UK listing for Shein would provide a significant boost for the LSE, which has seen several high-profile companies leave for listings elsewhere. Last month, Paddy Power owner Flutter confirmed its move from London to New York, and UK chip designer Arm opted for Wall Street last August. However, UK-based tech firm Raspberry Pi confirmed its intention to float in the UK last month.