Shein IPO Would Be London’s Largest Ever Stock Market Flotation

Singapore-headquartered online fashion colossus Shein is expected to file paperwork for London’s biggest ever stock market flotation, possibly this week.

After repeated attempts to move forward with listing its shares in the U.S. have been thwarted by an increasingly frosty business relationship between the U.S. and China, widespread reports over the weekend said that Shein, valued at $66 billion as of a fundraising last year, is close to filing a prospectus confidentially to the U.K.’s Financial Conduct Authority for the listing on the London Stock Exchange.

Any listing would not only put an end to what feels like retail’s longest running will they/won’t they IPO saga but also provide a huge boost for London’s beleaguered stock exchange, which has fallen out of favor in recent times for major corporate listings.

However, just as in the U.S., the listing could prove a political hand grenade. Shein’s potential decision to opt for London comes after initial efforts to float in New York were derailed when a number of politicians and industry regulators raised concerns over the tensions between Beijing and Washington.

Politicians Support Shein Listing

In bid to woo the retailer away from a New York listing, current U.K. chancellor Jeremy Hunt met with Shein’s executive chair Donald Tang earlier this year in a bid to try and persuade Shein to list in London.

Yet if opinion polls prove correct, the future of the Conservative government in Britain is likely to be short-lived, with a General Election called for 4 July that is widely expected to return a Labour government.

Because of that, more significant may be the fact that Jonathan Reynolds, the opposition’s shadow business secretary [who would become the government business secretary if Labour wins], plus Sarah Jones, the shadow minister for industry, and Chris Bryant, the shadow minister for creative industries, have also recently met with Tang to discuss the possible listing.

According to The Times, should Labour come to power next month, it would support Shein floating in the U.K. and although the expected filing of a prospectus does not guarantee that the company will list in the U.K., it does represent a significant next step ahead of a flotation in London, according to broadcaster Sky News.

Lawmakers Question Shein

However, as in the U.S., some senior British lawmakers have also questioned Shein’s suitability for a London listing and have called for greater scrutiny of the business. Shein has been at the centre of controversy over its use of cotton from the Xinjiang region of China and other issues related to labor rights across its global supply chain.

Shein has responded by claiming that it is strengthening governance and compliance and has been at pains to improve its environmental record.

The fast fashion retailer posted profits of more than $2 billion last year, nearly double the $1.1 billion it recorded just two years prior in 2021, and if it is listed in the U.K. it is estimated that it could be valued at over $63 billion.

The listing, currently anticipated as most likely this summer or early fall, would break all records and exceed the biggest previous London listing for commodities company Glencore’s $48.3 billion float in 2011 and the 2022 Haleon spin-off from GSK’s consumer goods arm for $38.7 billion.