Shein to kick off plans for £50bn UK float

Shein prepares plans for a public offering in the UK valued at £50 billion Shein, the fast fashion giant whose popularity surged during the COVID-19 pandemic, could tighten its ties with the UK by planning to sell shares on the London Stock Exchange.

The Chinese firm could file the relevant paperwork as soon as this week, potentially valuing the company at $66 billion (£51.7 billion).

Shein’s formula, which offers a wide range of cheap clothing backed by social media influencer campaigns, has made it one of the largest fashion retailers in the world.

However, it has faced severe criticism for its environmental practices as well as allegations of using forced labor in its supply chain.

A Shein spokesperson declined to comment.

In an attempt to improve its green credentials, the company launched a resale platform for buyers in France on Monday, two years after the option was first implemented for customers in the United States.

The platform is scheduled to launch in the UK and Germany later, though no date has been specified.

The company is considering the UK as a place to sell its shares after facing obstacles and intense scrutiny in the United States. Shein filed documents in the United States last November.

Some US lawmakers expressed concern over Shein’s ties to China as tensions between Washington and Beijing increased.

Shein relies on thousands of external suppliers as well as contracted manufacturers near its headquarters in Guangzhou, China.

It is capable of launching a new item in a matter of weeks, having accelerated the “test and repeat” model, first used by companies like Inditex, owner of Zara, where firms make small orders of clothing items, see how they perform with shoppers before ordering more if they are successful.

‘Big news… but not without controversy’ If Shein chooses the UK over the United States, it would be a significant boost for the City of London.

##### A UK share listing generates substantial business for the broader financial services industry, which still constitutes more than 10% of the country’s total economy.

After several companies opted for the United States, the UK government has been striving to make the country more attractive for companies to establish themselves.

Shein could file the initial paperwork, known as a prospectus, with the Financial Conduct Authority (FCA) this week, according to sources, or it could happen later in June.

Filing a prospectus with the FCA is a mandatory first step for any company wishing to sell shares on the London Stock Exchange.

“This could be big news for the London stock market,” said Colleen McHugh, investment director at investment firm Wealthify, on the BBC’s Today program.

But she admitted that the company could face some difficulties due to claims about how it conducts its business.

Filing with the financial regulator is a necessary first step, but it does not guarantee that the public offering will proceed.

Last year, a group of US lawmakers called for an investigation into Shein over claims that forced Uyghur labor was used to make some of the clothes it sells.

“We do not tolerate forced labor,” Shein told the BBC at the time.

Meanwhile, in May, a report suggested that workers at some of Shein’s suppliers still work 75-hour weeks, despite the company promising to improve conditions.

The investigation by the Swiss advocacy group Public Eye found that several employees at six sites in Guangzhou’s manufacturing hub were working excessive overtime.

According to the group, which interviewed 13 employees from six factories in China supplying Shein, excessive overtime was common for many workers.

Shein told the BBC it was “working hard” to address the issues raised by the Public Eye report and had made “significant progress in improving conditions.”

Regarding the London listing, Ms. McHugh said: “It will be up to the regulator whether the listing can proceed here in the UK, but it will not be without controversy.”

Shein’s CEO, Donald Tang, is a US citizen and a former Bear Stearns banker in Asia.

He has held meetings with Chancellor Jeremy Hunt and Shadow Business Secretary Jonathan Reynolds in recent months to discuss the possibility of listing in London after facing resistance from regulators and lawmakers in the United States.

A Labour spokesperson said they had met with a variety of companies, including Shein, “seeking to invest or list in the UK.”

“We expect the highest regulatory standards and business practices from any company operating in the UK. We believe the best way to ensure this is to have more companies operating from and regulated by UK law,” the spokesperson added.

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