According to reports, online fast fashion retailer Shein is gearing up to file paperwork for a potential London share listing as early as this week. The initial public offering (IPO) could see the company valued at approximately $66 billion (£51.7 billion).
Originally founded in China and now headquartered in Singapore, Shein intensified preparations for a share sale in the UK following regulatory challenges and heightened scrutiny in the US. A Shein spokesperson declined to provide comment on the matter.
Notably, Shein has faced accusations of unethical business practices in the past, including allegations of forced labor. A confidential filing with the UK’s Financial Conduct Authority is expected to set the stage for a significant stock market debut in London.
While initial reports suggest the filing may occur this week, Sky News indicated that it could potentially be postponed to later in June.
“This could be big news for the London stock market – there haven’t exactly been many IPOs this year,” Colleen McHugh, chief investment officer at Wealthify, the investment firm, said.
Shein previously filed paperwork for a potential New York listing with the Securities and Exchange Commission (SEC), as reported by Reuters in January. However, the company encountered resistance from US lawmakers concerned about its ties to China amid escalating tensions between Washington and Beijing.
In response to allegations of Uyghur forced labor in its supply chain, Shein asserted a “zero tolerance” policy for forced labor. Despite facing scrutiny both within and outside the US, Shein is speculated to explore listing its shares in London.
A recent report highlighted ongoing concerns about labor conditions among some of Shein’s suppliers, with workers reportedly still working excessively long hours despite promises from the company to improve conditions.
A follow-up investigation by Swiss advocacy group Public Eye revealed that excessive overtime remains common for many workers across Shein’s supplier factories in China.
Shein stated its commitment to addressing the issues raised by the Public Eye report and claimed to have made significant progress in enhancing conditions.
The possibility of a listing in the UK raises questions about the controversies surrounding Shein’s labor and sustainability practices. However, the decision ultimately lies with the regulator regarding whether the listing can proceed in the UK, although it is expected to be met with controversy.
Since its inception in 2008, Shein has experienced rapid growth and emerged as one of the world’s largest fashion retailers, particularly during the Covid pandemic lockdowns.
Its business model, characterized by offering a wide range of inexpensive clothing and leveraging social media platforms for promotion, has contributed to its success. Shein relies on numerous third-party suppliers and contract manufacturers near its headquarters in Guangzhou, enabling it to introduce new items quickly.
