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Chinese fast fashion giant Shein is preparing for a £50bn listing on the London Stock Exchange, which would be the largest share debut in over a decade.
The online retailer, known for its rapid product launches and low prices, is set to file registration documents with the Financial Conduct Authority, signalling its serious consideration of London for its IPO later this year.
Despite this step, sources close to Shein have sought to temper speculation about an imminent float. If successful, the listing would be the largest in London since Glencore’s £38bn IPO in 2011, potentially revitalising the city’s struggling stock market.
London has been grappling with its image as a declining market, following a significant exodus of companies and a lack of new listings. Wayne Brown, an analyst at Liberum, suggested that attracting Shein “could hopefully bring more inflows into the UK and generate more interest in UK PLC.”
In Westminster, Shein has generated significant interest. Senior figures from both Labour and the Conservatives have recently met with Shein’s representatives, including a meeting between Shadow Business Secretary Jonathan Reynolds and Shein’s executive chairman Donald Tang with Chancellor Jeremy Hunt.
A Labour spokesperson confirmed the party’s engagement with Shein as part of its standard practice with companies considering investment or listing in the UK. However, attracting Shein may yield less benefit than hoped, as the company’s interest in London is driven more by challenges in securing a US listing amid ongoing US-China tensions.
Shein’s attempts to list in New York have faced resistance due to concerns over its cotton supply, with allegations of forced labour in Xinjiang. US Senator Marco Rubio has led opposition efforts, and earlier this month, about two dozen US lawmakers urged the Securities and Exchange Commission (SEC) to halt Shein’s IPO until it can confirm it does not use forced labour.
A Shein spokesperson responded, “Shein has a zero-tolerance policy for forced labour and we are committed to respecting human rights. We take visibility across our entire supply chain seriously and require our contract manufacturers to only source cotton from approved regions.”
Labour may need to address these supply chain concerns should Shein proceed with its London IPO. The party could vet the deal for national security implications, though it currently sees no threat.
A Labour spokesperson reiterated the party’s commitment to high regulatory standards and business practices, stating, “We expect the highest regulatory standards from any company operating in the UK.”
City investors also express scepticism about embracing Shein. One fund manager described the planned structure of the deal, with Shein looking to raise £1bn by selling just a 5% stake, as a sign of London’s desperation for listings. Many fund managers prefer a steady influx of smaller companies rather than giant firms like Shein, highlighting tech start-up Raspberry Pi as an ideal investment target.
Furthermore, UK high street leaders have raised concerns about tax loopholes allowing Shein to undercut rivals by shipping individual orders directly from China, avoiding bulk import taxes. Wayne Brown of Liberum questioned whether Shein operates on a level playing field with UK growth companies.
Shein also faces allegations of industrial-scale copyright infringement, with lawsuits from H&M in Hong Kong and other claims in the US accusing it of copying designs using sophisticated algorithms. Shein has maintained that it takes infringement claims seriously and acts swiftly on valid complaints.
Despite these challenges, Brown acknowledged Shein’s innovative business model, praising its direct consumer approach and low-cost manufacturing as disruptive and technologically advanced.
However, the risk of these issues derailing the IPO remains a significant concern. A failed £50bn float would further harm London’s market. Brown emphasised the importance of addressing these difficult questions to ensure the London stock market remains a viable place to raise capital.
