Fast-fashion retailer Shein is advancing its plans for a London stock market debut, with informal investor roadshows scheduled to commence in the coming weeks, according to sources familiar with the matter.

The Singapore-headquartered company, which was valued at $66 billion in its last funding round, has shifted its attention to London after encountering obstacles in its initial plan to list in New York. The move comes as Shein seeks to navigate complex regulatory requirements from both British and Chinese authorities.

Reporting from Reuters indicates that the company, known for its ultra-affordable clothing such as $5 tops and $10 dresses, will conduct informal meetings primarily with European investors to gauge interest in the potential initial public offering (IPO). These preparations follow Shein's confidential filing with Britain's Financial Conduct Authority (FCA) in early June.

The listing would provide a significant boost to London's struggling IPO market, which has seen just nine new listings this year compared to 18 in 2023. The UK currently ranks tenth among venues for listings in Europe, the Middle East and Africa in terms of IPO value.

Financial analysts at Bernstein estimate that Shein's net profit more than doubled to $2 billion in 2022 from $700 million the previous year, achieving a profit margin of 4.4 per cent of sales.

However, the company faces mounting challenges in Europe. A coalition of governments, including Germany, France, and the Netherlands, has recently called for stricter enforcement of EU standards on online platforms. They are also supporting the removal of duty exemptions on parcels worth less than 150 euros, a move that investors suggest could impact Shein's profitability.

The timeline for the IPO remains subject to regulatory approval, with the company reportedly aiming to launch the float in the current quarter. Notably, Shein still requires approval from the China Securities Regulatory Commission (CSRC), which earlier this year expressed concerns about the company's supply chain issues in relation to its proposed US listing.

The shift to London comes as the UK has implemented new rules to streamline the listing process and attract more companies to its stock exchange, as it competes with New York and the European Union in the post-Brexit landscape.

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