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Shein Files for London IPO Amid Regulatory Challenges

Quiver Editor

Shein has confidentially filed papers with Britain's Financial Conduct Authority (FCA) in early June, initiating the process for a potential London listing later this year, according to two sources. The fast-fashion retailer, valued at $66 billion in a fundraising round last year, had initially planned to list in New York but faced opposition from U.S. lawmakers. Shein has since updated China's securities regulator about the change in listing venue, but has yet to receive approval from the China Securities Regulatory Commission (CSRC). The FCA typically takes a few months to vet and decide on clearance.

The approval from both the FCA and CSRC would allow Shein to publicly file an intention to float on the London Stock Exchange, kicking off a four-week process of book building and price guidance before trading begins. This potential UK listing could coincide with a new government, as opinion polls suggest Keir Starmer's Labour Party may win the upcoming July 4 election, ending the Conservative's 14-year rule. Labour has indicated support for Shein's London listing, which would boost the UK market. However, some senior lawmakers have called for greater scrutiny of Shein's labor practices, supply chain, and import tax exemptions.

Market Overview:
  • Shein files for London listing amid challenges in the U.S. market.
  • Approval needed from both FCA and CSRC for the listing to proceed.
  • Potential listing aligns with UK's political landscape change.
Key Points:
  • Shein valued at $66 billion from last year's fundraising round.
  • London listing follows opposition to New York IPO from U.S. lawmakers.
  • Labour Party supports listing, but scrutiny over labor practices persists.
Looking Ahead:
  • FCA's vetting process and CSRC's approval are critical next steps.
  • Labour's potential election win could impact listing environment.
  • Market volatility in Europe presents challenges for new listings.

Shein's decision to shift from a U.S. IPO to a London listing reflects strategic adjustments amid regulatory and political challenges. The company's move comes as it seeks to strengthen governance and compliance across its supply chain, addressing concerns from various stakeholders. The outcome of Shein's London listing process will be closely watched, especially given the broader market conditions and the political landscape in the UK.

Shein's London filing represents a significant pivot from its long-running U.S. IPO plans, which have encountered obstacles at home and abroad. The CSRC had previously advised against a U.S. IPO due to supply chain issues. This shift mirrors the broader difficulties faced by companies aiming for public listings in a volatile European market, as highlighted by Italian luxury sneaker maker Golden Goose's recent IPO postponement due to political uncertainty.

About the Author

David Love is an editor at Quiver Quantitative, with a focus on global markets and breaking news. Prior to joining Quiver, David was the CEO of Winter Haven Capital.

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