Two informed sources have revealed that Chinese fast fashion giant Shein is intensively preparing for its listing in London. Previously, Shein attempted to list in New York but faced regulatory obstacles and resistance from US lawmakers.
According to sources who spoke to Reuters, Shein is planning to report the latest updates on the change of the initial public offering (IPO) location to the China Securities Regulatory Commission and hopes to submit an application to the London Stock Exchange (LSE) this month.
In a financing round last May, Shein was valued at approximately $66 billion. Sources mentioned that earlier this year, Shein started contacting financial and legal advisory teams in London to discuss the listing in London.
Another source familiar with the matter mentioned that Shein has also been in touch with fund managers in London, aiming to hold an introduction meeting before the public listing.
Shein and the London Stock Exchange declined to comment on Reuters’ request for comments. The China Securities Regulatory Commission did not respond to the comment request.
Sources revealed that in November, Shein secretly submitted an IPO application to the US Securities and Exchange Commission (SEC) and contacted Chinese regulatory authorities in the same month to seek approval from the Chinese authorities.
While the plan for listing in the US is still under discussion, Shein has faced several scandals, including multiple lawsuits for plagiarism and potential involvement in forced labor in its supply chain in China.
In a report by Bloomberg in 2022, it was found that Shein’s clothing used Xinjiang cotton, but the company denied this allegation.
Despite relocating its headquarters from Nanjing to Singapore and selling affordable fashion in more than 150 countries, Shein does not own or operate any production facilities, instead relying on approximately 5,400 third-party contract manufacturers mostly in China. Reuters pointed out that this makes Shein subject to the listing rules of the China Securities Regulatory Commission.
One source mentioned that the China Securities Regulatory Commission notified Shein earlier this year that due to the company’s supply chain issues, the Chinese authorities do not recommend its listing in the US.
Another source stated that while Shein is currently preparing for a listing in London, it still hopes to list in New York and plans to continue submitting applications to the SEC.
The second source added that if the company considers the political climate in the US more favorable, it could also pursue a secondary listing in New York after listing in London.
Given that today is the US election day, the regulatory scrutiny in the US is particularly stringent. The two sources mentioned that the SEC has not advanced Shein’s IPO application, indicating the complexity of the application.
SEC did not respond to Reuters’ request for comments.
Sources indicated that if Shein successfully goes public, it could be one of the largest IPOs globally this year.
Sky News reported in December last year, citing sources, that during his visit to London, Shein’s Chairman Donald Tang met with exchange executives and other relevant parties.