Shein Looking to File For IPO in London as US Plans in Limbo

Chinese fast fashion retailer Shein is looking to file for an initial public offering (IPO) on the London Stock Exchange (LSE) this month, as its plans to list in the US remain stuck in limbo.

Shein started engaging with the London-based teams of its financial and legal advisors to explore a listing on the LSE early this year, sources said.

It has also approached London-based fund managers for introductory meetings ahead of the planned float.

Also on AF: Foreign Direct Investment in China Plunges 56% in Q1: Nikkei

Shein was valued at $66 billion in a fundraising last year, one of the sources said.

It also plans to update China’s securities regulator on the change of listing venue, people with knowledge of the matter said. That would make Shein subject to Beijing’s approval under the new listing rules for Chinese firms going public offshore, sources said.

The IPO, if it materialises, could be one of the largest globally this year, they added.

For London, it could mark a turnaround after companies such as UK chip designer Arm chose to list in New York to chase deeper pools of liquidity. So far this year, there have been just four UK IPOs out of more than 30 in Europe.

Sky News reported in December, citing sources, that Shein’s chairman Donald Tang had met executives from the bourse and other stakeholders in the UK economy during a visit to London that month.

New York still the preferred destination

The London IPO plans come as but the Singapore-based company has been struggling to clear regulatory hurdles both in the US and China for a New York listing.

Shein confidentially filed for an IPO with the US Securities and Exchange Commission in November. But the SEC is yet to clear those plans amid accusations from US lawmakers on the company’s alleged use of forced labour.

Shein is also facing lawsuits from competitors for copyright and trademark infringements to intimidation. In February, the Financial Times reported at least 93 different designers and companies have filed lawsuits in US federal courts against Shein since 2018.

One of those was filed by China-based rival Temu, which accused Shein of ‘mafia-style’ intimidation of manufacturers.

But the plan for a US IPO is still officially on the table for Shein as it still prefers New York as its listing venue.

Shein plans to keep its SEC application alive in case there is a change in the stance of US regulators, one source said.

It may also pursue a secondary US listing in New York following its London IPO when it deems the US political climate to be more favourable, the second source added.

Beijing unsure of US IPO

Shein has also filed with the China Securities Regulatory Commission (CSRC) for permission for an offshore listing. It approached the CSRC for the US IPO in November 2023, sources have said.

But the regulator informed Shein earlier this year it would not recommend a US IPO due to the company’s supply chain issues, one source said.

Shein would need Beijing’s nod for any overseas listing despite having moved its headquarters from China’s Nanjing to Singapore in 2022.

That’s because the group does not own or operate any manufacturing facilities, relying instead on about 5,400 third-party contract manufacturers, mainly in China.

Over the past year, the CSRC has introduced new overseas listing rules, throwing many Chinese firms’ plans for overseas listings in a limbo.

The rules are applied on “a substance over form” basis, giving the CSRC discretion on when and how to implement them, sources have said.

Under the new rules, a host of Chinese authorities such as the National Development and Reform Commission, which supervises foreign holdings in local firms, the cybersecurity regulator and others may get involved in approving offshore IPO applications.

The Cyberspace Administration of China (CAC) has also been conducting a procedural cybersecurity review of the company’s data handling and sharing practices, mainly about information on its suppliers in China, as part of the IPO clearance process, said a separate source with knowledge of the matter.

The CSRC’s stance on Shein’s London IPO plans remains unknown. However, China’s recent go ahead to electric vehicle-maker Zeekr to list in the US suggests Beijing may be softening its approach to overseas listings.

Zeekr debuted on the New York Stock Exchange on Friday, raking in gains of more than 30% in its first trading session.

• Reuters, with additional editing by Vishakha Saxena

Also read:

US Lawmakers Demand Supply Chain Check Before Shein IPO

China E-Commerce Giants Face Tariff Hit if US Bill Passed

China Offshore Listings Backlog Blamed on New Scrutiny Rules

China’s Feuding Online Fashion Retailers: Temu vs Shein

China E-Commerce Giant Shein’s Sales Soar 50% – Pandaily

China Fashion Giant Shein Accused of Design Theft – WSJ