Shein prepares for London Stock Exchange listing

Shein plans for a London Stock Exchange listing after facing hurdles in New York. It’s in a race against time. Matthew Partridge reports

Inauguration Of Shein's Ephemeral Store In Madrid
(Image credit: Europa Press News / Contributor)

The fast-fashion group Shein, valued at $66bn in a fundraising round last year, is preparing to list in London, says The Guardian

Its attempt to float in New York earlier this year faced “regulatory hurdles and pushback from US lawmakers”. The news comes on the heels of warnings from the China Securities Regulatory Commission that it “would not recommend” a listing in the US. 

As a result, the online retailer may now file with the London Stock Exchange (LSE) as soon as this month. London may be Shein’s “second choice”, but the news will be welcomed by both the government and the London Stock Exchange, which have both been “pedalling hard to attract” fresh initial public offerings (IPOs), says Susannah Streeter of Hargreaves Lansdown

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Still, despite the boost for the City, the company is likely to present “deep ethical issues for investors to navigate”. In particular, Shein has come under “significant criticism” for the “huge volumes of cheap clothes it produces, the lack of transparency in its supply chain and its appropriation of other designers’ work”.

Will Shein be welcomed on the London Stock Exchange? 

Shein certainly comes “with more baggage than a celebrity takes on holiday”, says AJ Bell’s Dan Coatsworth. However, the fact that it’s a “household name” in many parts of the world, as well as a company that “everyone is talking about”, thanks to the “attractive prices” that it offers, will give it a leg-up with investors. 

What’s more, many argue that the fact it wants “to be seen as a global player and not simply a Chinese firm flogging cheap togs overseas” means it will learn “to do things the right way and become a good corporate citizen”. That “could encourage others to look hard at the UK as a listing venue”. 

Not so fast, says Alex Brummer in the Daily Mail. Even if you ignore the ethical issues, the IPO may not live up to the previous “heady valuation” from its last round of fundraising. After all, “fast fashion can be a volatile enterprise”, as former “king of the high street” Philip Green found out the hard way. 

What’s more, while Shein is nominally headquartered in Singapore, its large exposure to China means that it could be caught up in the geopolitical fallout from any Chinese attack on Taiwan, such as sanctions, frozen assets or even delisting

Many British fund managers have seen plenty of consumer-orientated companies “disappoint” after coming to the market in a “blaze of hype”, says Sam Chambers in The Sunday Times. As a result, they may “proceed with caution”. 

Already, some observers are wondering whether the group’s “stratospheric rise could soon level off” thanks to intense competition from Shein’s rival Temu and the prospect of regulatory crackdowns on fast fashion. There is general agreement that Shein “can’t put off its float for much longer” if it wants to get a decent price.

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Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri