FAST-FASHION company Shein is considering the possibility of switching its initial public offering (IPO) to London from New York because of hurdles to the listing in the United States, according to sources with knowledge of the matter.
Shein, which was founded in China but is now headquartered in Singapore, is in the early stages of exploring the London option as it has judged it unlikely that the US Securities and Exchange Commission (SEC) will approve its IPO, the sources said, asking not to be identified discussing confidential information.
Shein is still working on its application to list in the US as its preferred location, the sources said. It would need to file a new overseas listing application with Chinese regulators if it decided to switch to London or elsewhere, they added. Other venues including Hong Kong or Singapore may also be considered, two of the sources said.
A representative for Shein declined to comment.
A listing in London would be a potential boon to the beleaguered market, after one of the worst years for IPOs in its modern history. Just about US$1 billion was raised in the United Kingdom via IPOs last year, the lowest level in decades, according to data compiled by Bloomberg.
The UK is also struggling to stem an exodus of firms to the US and elsewhere. Chip designer Arm Holdings spurned London for a New York IPO last year even after the UK government lobbied for a domestic listing by the Cambridge, England-based company. Already-listed companies are migrating abroad, with TUI shareholders voting earlier this month to delist from the London Stock Exchange and move trading primarily to Germany.
Small and rare
US IPOs by Chinese companies have mostly been small and rare in the years since Didi Global was forced off the boards in New York, part of a crackdown that essentially closed the market to first-time share sales by Chinese firms. Amer Sports’s US$1.6 billion offering in February was the biggest China-backed IPO to tap the US market since Didi raised US$4.4 billion in 2021, and the first to raise more than US$200 million in that time.
Shein has been subject to scrutiny from the US, with Senator Marco Rubio among those asking the SEC to block its listing, saying the company needs to disclose more about its operations in China. Last year, a member of the US Congress asked for a probe into Shein’s cotton supply from Xinjiang. US-China trade tensions have also been simmering for years.
A pioneer of ultra-fast fashion with items such as shirts and swimsuits for as little as US$2, Shein filed last year for a US IPO aiming for a valuation of US$80 billion to US$90 billion, sources familiar with the matter said at the time. Private trades in late 2023 valued the company much lower, at about US$50 billion. BLOOMBERG
