Shein IPO: Why the rumored London stock listing is as surprising as it is controversial

Fast-fashion retailer Shein is reportedly ready again to jumpstart the process of going public—just not in New York as it originally hoped.

According to the British media, the company, founded in China but based in Singapore, will list its shares across the Atlantic in London. Sky News reported Monday that the company known for $4 swimsuits and $12 sneakers plans to file a prospectus “as soon as the coming week” to list there, reportedly at a valuation of 50 billion pounds (around $65 billion). That would put it among the largest IPOs in recent memory, and represent a real coup for the London Stock Exchange (LSE).

Shein has spent months attempting to pull off an IPO, according to media reports, although efforts hit considerable roadblocks in New York, its first choice. Even if these London plans go through, Sky quoted predictions of a summer or fall market debut.

Fast Company reached out to Shein to ask about its IPO plans but did not hear back.

London? Who lists over there?

Unfortunately for London, the answer lately is almost nobody. Which is why jumping markets works well for Shein.

Shein spent months filing paperwork and lobbying Washington politicians to get permission for a New York IPO, hoping to list at an $80 billion to $90 billion valuation—more than Roblox and Robinhood combined.

Its filing with the U.S. Securities and Exchange Commission (SEC) drew immediate probes from regulators and a rare bipartisan pushback by members of Congress who have a lot of questions about the provenance of Shein’s insanely cheap clothing.

Back in February, Senator Marco Rubio of Florida asked the SEC to freeze any listing until Shein answered additional questions about ties to the Communist Party in Beijing and where it sources its materials.

In October, Representative Jennifer Wexton, a Democrat from Virginia, sent the Department of Homeland Security a letter telling it to go even further: Investigate if the retailer is breaking the so-called Uyghur Forced Labor Prevention Act, setting up the U.S. government to ban the company from the United States entirely if it were in violation.

Pouring salt on the wound, the National Retail Federation (NRF) has reportedly rejected multiple attempts by Shein to join the industry’s top trade group.

The ironic position Shein found itself in is that it strenuously denies clothes are produced using forced labor, repeatedly citing a zero-tolerance policy. But to win over U.S. authorities would require being more transparent, which could put it in the crosshairs of Beijing: Publicly disclosing that it avoids cotton from Xinjiang might suggest that Shein is siding with foreign adversaries over the Communist Party.

But London is likely to prove a more hospitable listing environment. (Critics argue it has a bit of a reputation for this; official regulators at the Financial Conduct Authority got flack in 2017 for trying to lure state-owned Saudi Aramco, the world’s second-largest company by revenue, to list there.)

Technically, Shein hasn’t withdrawn the IPO application it filed in November yet. It had secured the backing of heavy hitters: Goldman Sachs, JPMorgan Chase, and Morgan Stanley were all signed on as underwriters. But by end of the start of this year, it was becoming more evident to the parties involved that their deal was dead in the water. Shein had reportedly been eyeing Hong Kong and Singapore too, but pivoted strategically to London.

What makes it strategic? Because London is thirsty for IPO action. Back in February, Bloomberg described a potential Shein listing as being able to buoy the “beleaguered” market after “one of the worst years for IPOs in its modern history,” noting that the LSE raised just $1 billion in 2023, its worst performance “in decades.” (For context, Nasdaq and the New York Stock Exchange brought in more than $24 billion last year.)

Is Shein actually worth $60 billion?

It’s too early to gauge how warm a welcome British investors will give to Shein and what Shein represents. A mid-$60 billion valuation would place Shein among the London Stock Exchange’s top 15 listed companies by market capitalization, putting it in league with AstraZeneca, BP, Shell, and the bank HSBC.

But criticism in recent months has started to spill over beyond politicians in Washington, even as sales continue to climb, to what now may exceed $30 billion a year. Two weeks ago, Saturday Night Live and Jake Gyllenhaal did a skit that was a pretty brutal send-up of Shein and similar Chinese fast-fashion labels:

“Dress, $10. Shoes,$5,” a voiceover says in the ad, alarming the models enough for them to break character and ask, “How so cheap…?” The words “Don’t worry about it” flash on the screen, and the spot moves in a darker direction: “Modern styles. Designer dupes. No prisoners involved.”

So what happens next?

Shein needs approval from the U.K.’s Financial Conduct Authority. It also needs separate approval from a sort of Beijing counterpart, the China Securities Regulatory Commission, to list outside of China.

However, despite the cold welcome that Shein is receiving from multiple fronts, according to media reports, one group is excited by the prospects of Shein joining the ranks of British public companies, and that’s the Britain’s political class. Elections are coming up in July, and the U.K.’s two rival parties—Labour and the Conservatives—have both held talks with Shein executive chairman Donald Tang to try and recruit Shein.

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