Shein is reportedly preparing to fire the starting gun on its London IPO this week in what will be the highest profile flotation for months.
The fast fashion retail company is thought to be seeking a valuation of over £51bn as London triumphs over New York in attracting Singapore-based Shein.
“It’s rumoured that it could file paperwork for an IPO as soon as this week, which may value the company at more than £51 billion,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
Streeter continued to explain that while Shein’s listing will be very welcomed with open arms by London’s struggling capital markets, there are ESG considerations which may prevent some investors taking a stake in the company.
“While New York still holds immense pulling power, and was the company’s first choice, plans for a listing there look unlikely given the lack of a welcome by regulators,” Streeter said.
“This is over its ties to China, where it was founded, and questions raised over its supply chain and working conditions. London looks set to be the second-choice destination and, while this would be a boost for the city, is likely to present deep ESG issues for investors to navigate.”
“Shein has come under significant criticism for the huge volumes of cheap clothes it produces, the lack of transparency in its supply chain and its appropriation of other designers’ work. Given these concerns, investors could be wary if ESG is on their priority list. Nonetheless confirmation of listing may be fresh election campaign fodder for the Conservatives, who are likely to say it demonstrates that government efforts in wooing firms to launch IPOs in London are paying off.”
