Shein preps £50bn London IPO filing amid heightened scrutiny

Online fashion juggernaut Shein is reportedly on the cusp of a major step towards a London stock market flotation that could value the company at around £50 billion.

Sky News reported on Sunday that Shein, founded in China but headquartered in Singapore, is readying to submit a prospectus to the Financial Conduct Authority for approval ahead of its potential initial public offering (IPO) on the London Stock Exchange.

City sources told the outlet that the confidential filing could happen as soon as this week, though it may be slightly later in June. This milestone would be the clearest sign yet that Shein, owner of British fashion brand Missguided, is set to stage London's most high-profile public listing in over a decade.

While the prospectus filing timing doesn't necessarily indicate when an IPO would occur, some observers believe a summer or early autumn market debut remains possible. Shein had originally targeted a New York listing but faced political opposition, leading it to pivot towards London.

The Sky News report noted that Shein executive chairman Donald Tang met Chancellor Jeremy Hunt and other ministers earlier this year, underlining UK officials' eagerness to secure the blockbuster float over American rivals.

If it proceeds with a London IPO, Shein is expected to raise over £1 billion from the sale of new shares, albeit modest compared to the anticipated £50 billion-plus valuation. The company was valued at $66 billion in early 2022.

However, Shein has courted controversy over its use of cotton from China's Xinjiang region and other labour rights issues across its vast supply chain. Goldman Sachs, JPMorgan and Morgan Stanley are advising on the potential mega-listing.

Senior British lawmakers, including the chairs of three parliamentary committees, have also raised questions about fast-fashion giant Shein's suitability for a London stock market listing and called for greater scrutiny of the Chinese-founded firm.

Last month, Alicia Kearns, the Conservative chair of parliament's Foreign Affairs Committee, said Shein should not be permitted to list in London, saying: "With Shein's prices so low, the London Stock Exchange needs to ask itself, whose suffering is subsidising those prices."

Sarah Champion, the Labour chair of the International Development Committee, expressed similar concerns about Shein's labour practices. "No company using modern slavery should be listed in London. Unless the allegations around Shein are addressed, we should not support their application," she said.

Founded in 2012, Shein boasts 150 million users across over 150 countries. Its mooted valuation would significantly exceed apparel giants like H&M and Inditex, the owner of Zara.

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