Shein files confidential paperwork ahead of possible London listing

Online fast-fashion group Shein has filed confidential paperwork for an initial public offering with the UK’s markets regulator, said two people familiar with the matter.

The move is taking Shein a step closer to what could be a blockbuster listing for London, following the company’s decision to ditch a planned IPO in New York. The Chinese-founded group could fetch a market valuation of about £50bn.

Shein, which grew in popularity during the coronavirus pandemic when millions of people switched to online shopping, submitted the pre-listing documentation with the Financial Conduct Authority this month, said one of the people.

The filing is a precursor to the Singapore-domiciled company releasing its IPO prospectus, which the UK regulator would have to approve before the listing.

Shein, which has the majority of its staff and manufacturing in China, has yet to receive approval from Beijing authorities to list in London.

The company could decide to sell shares for the first time elsewhere if it faces regulatory hurdles or better listing conditions somewhere else, the people briefed about the matter cautioned. A Hong Kong listing is another option under consideration, they added.

Shein, which is working with Goldman Sachs, JPMorgan and Morgan Stanley on its IPO plans, had planned to go public in New York but veered towards London after getting caught up in tensions between the US and China.

Donald Tang, Shein’s executive chair, told the Financial Times last month that the company had made “progress” on changing the perception that Beijing controlled it “but not enough” to win over US lawmakers.

A possible IPO would be a much-needed boost for the UK market. Senior politicians including Conservative chancellor Jeremy Hunt and Labour shadow business secretary Jonathan Reynolds have met figures from the company in recent months.

Labour, which is leading in the polls for general elections on July 4, has argued London should welcome a Shein flotation because it would impose higher regulatory standards on the company than elsewhere. Shein has faced allegations of forced labour in its supply chain, which it denies, saying it “has a zero-tolerance policy for forced labour”.

Asked about a potential London listing for Shein on Monday, Reynolds said: “If they’re doing business in the UK we should ideally seek to regulate them from the UK . . . So if a listing was to be considered I want that [to be in the UK] because I would know that is the way we could enforce the highest standards.”

Business secretary Kemi Badenoch said there were issues that her party would want to look at if the company were to list, citing potential “lost” taxes because of its business model and concerns over forced labour in China.

But speaking after Badenoch and Reynolds, junior business minister Kevin Hollinrake said of the Shein IPO that it “would be a prize to have that kind of listing in the London Stock Exchange”.

Requirements for UK companies to report on modern slavery in their supply chains could make the company “more accountable”, he added.

Shein and the FCA declined to comment. Reuters first reported on the confidential filing.

Letter in response to this article:

London market rebound needs more than one IPO / From Professor Bobby V Reddy, Professor of Corporate Law and Governance, University of Cambridge, Cambridgeshire, UK