According to two people with knowledge of the situation, fast-fashion behemoth Shein is intensifying plans for a London listing after encountering regulatory obstacles and resistance from US politicians during its effort to go public in New York.
One of them stated that the online fashion retailer intends to file with the London Stock Exchange (LSE) and notify China’s securities authority about the change in the venue for the initial public offering (IPO) as soon as this month.
The source and another person with knowledge of the situation stated that Shein, which one source claims was valued at $66 billion in a fundraising last year, began corresponding early this year with the teams of its financial and legal consultants stationed in London in order to investigate a listing on the LSE.
Prior to the anticipated float, the China-based fashion brand has also requested initial talks with fund managers located in London, according to a second source with firsthand knowledge of the situation.
The LSE declined to respond, as did Shein. A request for comment from the China Securities Regulatory Commission (CSRC) was not answered.
Prior to the anticipated float, the China-based fashion brand has also requested initial talks with fund managers located in London, according to a second source with firsthand knowledge of the situation.
The LSE declined to respond, as did Shein. A request for comment from the China Securities Regulatory Commission (CSRC) was not answered.
According to insiders, Shein approached the CSRC in November to request Beijing’s approval after filing in confidence for an initial public offering (IPO) with the U.S. Securities and Exchange Commission.
Although the Singapore-based firm is still formally considering a U.S. initial public offering (IPO), it has been facing difficulties in clearing regulatory obstacles in China and the U.S. due to accusations of labor abuses by U.S. politicians and litigation from rival companies.
According to a different source, Shein was notified by the CSRC earlier this year that the regulator would not advise a U.S. IPO because of the company’s supply chain problems.
Although the Singapore-based firm is still formally considering a U.S. initial public offering (IPO), it has been facing difficulties in clearing regulatory obstacles in China and the U.S. due to accusations of labor abuses by U.S. politicians and litigation from rival companies.
According to a different source, Shein was notified by the CSRC earlier this year that the regulator would not advise a U.S. IPO because of the company’s supply chain problems.
According to the second source, Shein is now preparing for a London IPO, but it still wants to list in New York and intends to maintain its SEC filing in case U.S. regulators change their minds.
The second source stated that after its London IPO, if it thinks the U.S. political environment is more favorable, it might also pursue a secondary U.S. listing in New York.
In an election year, American regulators have been more scrutinizing of the company than they had anticipated. The two individuals claimed that the SEC had not yet advanced Shein’s IPO filing, a sign of the delicate nature of the application procedure.
The second source stated that after its London IPO, if it thinks the U.S. political environment is more favorable, it might also pursue a secondary U.S. listing in New York.
In an election year, American regulators have been more scrutinizing of the company than they had anticipated. The two individuals claimed that the SEC had not yet advanced Shein’s IPO filing, a sign of the delicate nature of the application procedure.
A request for comment from the SEC was not answered.
According to the first and second sources, Shein’s proposal to update the Chinese regulator on the London IPO would require Beijing’s consent in accordance with the new listing requirements for Chinese companies going public offshore.
If the IPO goes through, it may be among the biggest in the world this year, according to sources.
Following the decision by businesses like British chip designer Arm to list in New York in an effort to access larger liquidity pools, this could signal a turning point for London. Out of over thirty IPOs in Europe so far this year, just four have occurred in the United Kingdom.
During a visit to London in December, Shein’s chairman Donald Tang met with executives from the stock exchange and other U.K. economy players, according to a report by Sky News in December, which cited sources.
Shein, well-known for its $10 tops and $5 biker shorts, has filed with the CSRC, putting it under Beijing’s approval for an offshore listing even though it relocated its headquarters from Nanjing, China, to Singapore in 2022. This shows how little the company has done to project an international rather than a Chinese image.
The company, which distributes low-cost clothing in more than 150 countries, relies on 5,400 contract manufacturers, mostly in China, rather than owning or running any production facilities. According to Reuters, this means that it is governed by the CSRC listing requirements.
