Shein, the leading online fashion retailer, is gearing up for a major milestone in its journey towards a London flotation that could value the company at an estimated £50bn. Sources familiar with the matter have revealed to Sky News that Shein, headquartered in Singapore but founded in China, is expected to file a prospectus with the Financial Conduct Authority (FCA) for approval in the coming week.
While the confidential filing does not guarantee an immediate initial public offering (IPO), it is a significant step towards Shein’s highly anticipated listing on the London Stock Exchange. The company, which owns popular British fashion brand Missguided, is poised to become London’s most high-profile public float in over a decade.
City sources have suggested that Shein’s IPO could take place in the summer or early autumn, although no official timeline has been announced. The decision to list in London comes after facing political opposition in its initial plan to list in New York, resulting in a lukewarm reception from regulators.
Earlier this year, Sky News revealed that Shein’s executive chairman, Donald Tang, had met with UK officials, including the Chancellor of the Exchequer, Jeremy Hunt, to discuss the potential IPO. This meeting highlighted the British government’s efforts to attract Shein to list in London, potentially surpassing the US and securing a significant IPO for the City.
In addition to government officials, Mr. Tang is said to have engaged with frontbench Labour politicians, such as Jonathan Reynolds, the shadow business secretary, in recent months. However, a final decision on the listing will be subject to meetings with investors and the approval of listing authorities in the UK.
Despite facing controversy over its use of cotton from China’s Xinjiang region and concerns over workers’ rights, Shein is expected to seek over £1bn from the sale of new shares to investors in its London IPO. This amount may seem modest compared to its estimated valuation of £50bn, given that the company was valued at $66bn in its last funding round in 2020.
Last month, it was reported that Sajid Javid, the former Chancellor of the Exchequer, had been approached for a potential role at Shein, either as a board member or advisor. If the discussions proceed, it could add to the company’s impressive lineup of advisors, including global investment banks Goldman Sachs, JP Morgan, and Morgan Stanley.
Founded in China in 2012, Shein has quickly become a global fashion giant, with operations in over 150 countries and a user base of 150 million. Its potential IPO in London would make it the second-largest in the history of the London Stock Exchange, behind only Glencore International’s debut in 2011.
The LSE’s efforts to attract Shein come at a time when the City is facing challenges as a listing venue for large multinational companies. ARM Holdings, a UK-based chip designer, recently chose to list in New York instead of London, and other companies, such as Flutter Entertainment and TUI, have also moved their listings away from London for higher valuations and more liquid markets.
However, recent developments, such as the prospective IPOs of Raspberry Pi and Monzo, have delivered a boost to the City’s reputation as a listing destination. In May, Mr. Hunt hosted a summit at Dorneywood, attended by several technology companies, including Raspberry Pi and Monzo, to encourage them to list in the UK.
When approached for comment, Shein declined to make a statement on Sunday evening.