Due to tensions between Beijing and Washington, Shein plans IPO in London

Chinese fast fashion giant Shein plans to file for a listing on the London Stock Exchange this week, laying the groundwork for a successful initial public offering (IPO) in the United Kingdom. Although they initially planned to file for an IPO on Wall Street, due to tensions between Beijing and Washington, this Chinese giant has opted for a listing in London.

Shein’s CEO Donald Tang told the Financial Times last month that the company has made ‘progress’ in changing the perception that it is controlled by the Chinese government, but still ‘not enough’ to win the favor of the U.S. government and regulators. The company submitted documentation to the U.S. Securities and Exchange Commission more than six months ago, but concerns about Shein’s ties to Beijing have become the biggest obstacle to its listing on Wall Street, even though its main underwriters for the IPO were Goldman Sachs, JP Morgan Chase, and Morgan Stanley.

However, this company was valued at $66 billion in its latest funding round, and its listing on the stock exchange would be a significant event in London, which is currently lagging behind Wall Street. Shein recorded a record profit of $2 billion last year, while in 2022 it achieved a net profit of $700 million.

The Labour Party, which is widely expected to win power in the UK elections on July 4, stated to Reuters that Labour representatives met with Shein representatives ahead of a potential listing on the London Stock Exchange.

– Labour has met with a number of companies, including Shein, that want to invest or list in the UK – said a spokesperson for the opposition party. However, current British lawmakers have questioned Shein’s suitability for listing and have called for greater scrutiny of its supply chain.

They also stated that they expect ‘the highest regulatory standards and business practices’ from any company operating in the UK. Shein declined to comment on the meetings, which were first reported by The Times. Addressing governance issues, a spokesperson for Shein previously stated that they are investing millions to strengthen governance and compliance in the company’s supply chain.

UK Chancellor Jeremy Hunt held talks with Donald Tang in February when an unnamed source from the British government confirmed to the media that the company wants to issue an IPO on the London Stock Exchange. According to British media, Shein has already begun collaborating with London teams of its financial and legal advisors to explore a listing on the London Stock Exchange during this year.