Shein switches focus to London after New York IPO stalls

Shein is shifting towards a London listing in the coming months as tensions between Washington and Beijing stall the online fashion giant’s plans for a blockbuster flotation in New York.

In an interview with the Financial Times, executive chair Donald Tang said the Singapore-domiciled company had made “progress” on changing the perception that China controlled Shein “but not enough” to win over US lawmakers.

Concerns about Shein’s ties to Beijing have become the biggest hurdle in the path to a US initial public offering, for which it filed preparatory paperwork with the Securities and Exchange Commission six months ago.

Several people familiar with the company’s thinking said it had begun to prioritise its back-up plan of a UK float.

Tang declined to confirm the possibility of a London listing and said the on-demand ecommerce group, valued at $66bn in its last funding round, had yet to settle on a listing venue. “We want to explore all the options,” he said. “No decision has been made.”

Landing a flotation of Shein’s size would be a coup for the London Stock Exchange, which has been losing listings to its larger and more liquid New York rivals, the New York Stock Exchange and Nasdaq.

London has in recent years lost out on high-profile listings including Cambridge-based chip designer Arm Holdings. It has also suffered the departure of betting firm Flutter from the FTSE 100 in favour of a primary listing in New York.

Two people familiar with the matter said Shein had begun to switch focus to London, citing Shein founder Sky Xu’s “strong desire” for an IPO “as soon as possible”.

People familiar with the situation said China’s securities regulator had not yet given its approval for a New York IPO, while the SEC had not communicated recently with Shein, leaving it with little clarity on the prospects for a US listing. However, it was also unclear whether the China Securities Regulatory Commission would approve a UK float.

CSRC and the SEC did not respond to requests for comment.

Shein, however, has been “encouraged” by London’s embrace of the company, which has held high-level meetings with the LSE and UK officials, including Chancellor Jeremy Hunt, said a person close to the company.

Another person added Shein would later aim for a secondary listing in New York if it initially opted for the UK.

The company was founded in China and the vast majority of its suppliers are in the country. But it is now headquartered in Singapore and does not sell its products in China.

Tang said he felt “no time pressure” but Shein’s goal remained to seek a listing that could attract global investors. The primary objective was not raising cash, giving early investors an exit or creating a currency for acquisitions, he said. Instead, its priority was to prove to sceptics that it operated transparently.

“What could be better than a public company to enhance transparency? Right? The whole world is going to be looking at you in the public fish tank,” Tang said. “We want to have scrutiny.”

Chinese regulators are handling the case with caution, as Shein is the first big litmus test for the government’s new regime governing overseas listings of local companies introduced in March last year.

Two investors said Shein had expected the CSRC’s approval would be forthcoming, but said there was no clarity on why it had taken so long.

Additional reporting by Ryan McMorrow in Beijing