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Online fast fashion group Shein has filed confidential documents with Britain’s markets regulator for an initial public offering (IPO), according to two people familiar with the matter.
The move follows the company’s decision to abandon plans for a New York IPO and brings it a step closer to a major listing in London, which could value the China-founded group at around £50 billion.
SHEIN, which has grown in popularity as millions of people switched to online shopping during the coronavirus pandemic, filed pre-listing paperwork with the Financial Conduct Authority earlier this month, one of the people said.
The filing comes as a precursor to the Singapore-based company publishing its IPO prospectus, which will require approval from UK regulators before it can list.
Shein, which has most of its staff and manufacturing based in China, has yet to receive approval from Chinese authorities for a London listing.
People familiar with the matter cautioned that the company could decide to sell shares elsewhere for the first time if it faces regulatory hurdles or finds better terms for a listing elsewhere, with a Hong Kong listing also an option under consideration, the people added.
Shain, which is working on an IPO with Goldman Sachs, JP Morgan and Morgan Stanley, had originally planned to list in New York but was caught up in tensions between the U.S. and China and changed course to London.
Shine Chairman Donald Tang told the Financial Times last month that the company had made “progress” in changing the perception that it was controlled by Beijing but that it was “not enough” to win the support of U.S. lawmakers.
The company’s IPO would be a much-needed boost to the U.K. market, after leading British politicians including Conservative Chancellor of the Exchequer Jeremy Hunt and Labour’s shadow business secretary Jonathan Reynolds met with the company in recent months.
The Labour Party, which is leading the polls ahead of the July 4 general election, argues London should welcome Shine’s listing because it would mean the company would be held to stricter regulatory standards than any other company. Shine has faced allegations of forced labor in its supply chain, which it denies and says it has a “zero tolerance policy towards forced labor.”
Asked on Monday about the possibility of Shane listing in London, Reynolds said: “If they are operating in the UK then ideally they should be seeking regulation from the UK. So if they were to consider listing, [to be in the UK] Because we know that’s the way to enforce the highest standards.”
Business Minister Kemi Badenoch said issues the party would want to consider if the company were to list, citing potential “loss” tax due to its business model and concerns about forced labour in China.
However, following Badenoch and Reynolds’ speeches, Trade Minister Kevin Hollinrake said Shine’s IPO was “worthy of praise for pursuing such a listing on the London Stock Exchange”.
Making it mandatory for UK companies to report on modern slavery in their supply chains could make them “more accountable”, he added.
Shane and FCA declined to comment. Reuters first reported the confidential document.
