Is Retailer Shein Preparing for a London IPO?

Fast fashion stock believed to be readying for a London float rather than a New York listing

Alliance News 13 May, 2024 | 12:13PM
Facebook Twitter LinkedIn

Shein store

Shein will press ahead with a London float, Reuters reported, dodging regulatory hurdles that stemmed from a possible New York listing.

The fast fashion retailer plans to tell China's securities watchdog of its intention to change its initial public offering venue to the London Stock Exchange, Reuters reported, citing a person with knowledge of the matter. It can file with the LSE as soon as this month.

Reuters reported Shein confidentially filed for an IPO with the US securities regulator in November, and approached China's watchdog to get the green light from Beijing. But Shein's possible New York listing faced opposition from US lawmakers.

Reuters reported Shein prefers New York as a listing venue to London, and still plans to keep its US float hopes alive. It could also pursue a secondary US listing following a London IPO, once the political backdrop is more favourable.

A Boost, But Governance Concerns Surround Shein

Dan Coatsworth, investment analyst at AJ Bell says:

“Shein is such a big name in the world of retail that its mere presence on the London market could encourage others to look hard at the UK as a listing venue.

“It is now a household name in many parts of the world and that’s what many investors love to see when picking stocks. They want to find companies that everyone is talking about – just ask any teenager or young adult where they buy clothes and Shein is likely to be near the top of the list due to its attractive prices.

“The key negative is that Shein comes with more baggage than a celebrity takes on holiday. Questions continue to be asked about its corporate governance standards, working conditions, supply chain and accusations of intellectual property theft.

The UK Market's Tough Choice

“Key reasons why Shein might choose to list in London are the more relaxed rules and requirements versus other venues like the US, and there is a risk that the UK develops a reputation for admitting companies with more questionable qualities.

“Therein lies a key problem. London wants to find ways to attract more listings but it must not tarnish its reputation by letting in bad eggs. Approximately 10 years ago we had a wave of Chinese companies flood the AIM market and most ended in disaster or disappointment.

“Shein wants to be seen as a global player and not simply a Chinese firm flogging cheap togs overseas. It will have to do things the right way and become a good corporate citizen to support this ambition, so it’s on a learning journey. London Stock Exchange will publicly welcome the company with open arms but behind closed doors it will no doubt be hoping Shein has no skeletons in its closet.”


The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Alliance News  provides Morningstar with continuously updating coverage of news affecting listed companies.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures