London is in desperate need of a blockbuster IPO. This may be delivered in the form of Shein, the Chinese fast fashion brand.
Should the company press on with its reported plans to list on the London Stock Exchange, it will be the biggest IPO in London so far this year and provide a much-needed boost to the UK’s capital markets.
According to the company’s website, Shein employs 11,00 people globally and is present in over 150 countries.
The Financial Times reported earlier this year that Shein’s profits have doubled to $2bn on gross merchandise value sales of $45bn. Gross merchandise value is the total amount of sales from its website. This compares to UK-based online retail ASOS’s revenue of £3.5bn in the 2023 full year.
“Speculation is rife that Chinese fashion group Shein is on the verge of confirming its intention to list in London, as well as electronics group Raspberry Pi in the coming days. Both names would bring some sparkle to the market and potentially encourage other companies to take advantage of the new-found oomph in UK equities,” said Dan Coatsworth, investment analyst at AJ Bell.
“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.”
While Shein would be a boon for London’s capital market, some analysts have highlighted the additional scrutiny the business would come under may reveal turn-offs for investors in terms of supply chain practices.
“With Shein reportedly homing in on a potential London IPO the last thing the Chinese fast fashion retailer needed was further scrutiny of its supply chain,” said AJ Bell head of financial analysis Danni Hewson.
“Reports of 75-hour days for workers churning out its myriad of products will prove uncomfortable reading for potential investors and consumers alike.
“Such a huge listing would be a boon for London markets which have seen very little incoming activity to offset the companies leaving the field, but it could ultimately prove a poisoned chalice unless the company can overcome key concerns about its working practices.”
