According to sources familiar with the matter who confirmed to Reuters on Friday (May 2), the online fast fashion retailer Shein has terminated its cooperation with the public relations companies Brunswick and FGS, indicating a major setback for its London initial public offering (IPO) plan under preparation.
Headquartered in Singapore, this retailer is facing pressure from the United States’ cancellation of the e-commerce “De Minimis” exemption policy. Starting from Friday, cheap small parcels on platforms like Shein and Temu may either have to pay 120% tariffs or a fixed fee of $100 per item. As of June 1, the fixed fee will increase to $200.
Insiders indicated that Brunswick was responsible for media communication, while FGS was in charge of government relations. The contracts of both public companies with Shein expired on April 30 and were not renewed. This was first reported by The Times.
Shein’s IPO prospectus recently received preliminary approval from the UK Financial Conduct Authority (FCA). However, this approval was obtained before the implementation of Trump’s tax policy. Therefore, if there are significant changes in the prospectus, Shein may need to resubmit an updated version and reapply for approval.
In addition, the company’s IPO in the UK has not yet obtained approval from regulatory authorities in mainland China, posing a major obstacle that must be overcome in the listing process.
A Reuters report last month indicated that Shein originally planned to complete its IPO in the first half of the year, but now the IPO is expected to be delayed to at least the second half of the year.
Most of Shein’s apparel products come from China. Under the previous “De Minimis” policy, the company and platforms like Temu were able to ship low-cost goods directly across borders to global consumers without paying tariffs or import taxes. However, this policy has now been officially revoked.
Shein’s Chinese competitor, Temu, announced on Friday that it will stop directly selling imported goods from China to US customers through its platform.
According to the US Customs and Border Protection, over 90% of imported goods entering the US through the “De Minimis” duty-free policy.