The Singapore-based online fashion group Shein has submitted confidential documents for an initial public offering to the UK Financial Conduct Authority (FCA). This was reported by two people familiar with the matter.
This brings Shein one step closer to a potential IPO in London, after the company scrapped its originally planned IPO plans in New York. The China-founded company could reach a market valuation of about 50 billion pounds.
Shein, which gained significant popularity during the Corona pandemic as millions of people switched to online shopping, submitted the preliminary listing documentation to the Financial Conduct Authority earlier this month, according to one of the sources.
The submission is a precursor to the publication of the company's IPO prospectus, which needs to be approved by the UK regulator before the listing can take place.
Shein, whose main workforce and manufacturing facilities are located in China, has not yet received approval from the Chinese authorities to go public in London.
The company might decide to sell its shares elsewhere for the first time if there are regulatory hurdles or better listing conditions available elsewhere, warned informed persons. A listing in Hong Kong is another option being considered, they added.
Shein, which is working with Goldman Sachs, JPMorgan, and Morgan Stanley on its IPO plans, had originally planned to go public in New York but shifted its plans to London after the company got caught in the tensions between the USA and China.
Donald Tang, Executive Chairman of Shein, said to the Financial Times last month that the company had made progress in changing the perception that it is controlled by Beijing, "but not enough" to convince US lawmakers.
An IPO could provide a much-needed boost for the UK market. Leading British politicians, including the Conservative Chancellor Jeremy Hunt and the Labour Shadow Business Secretary Jonathan Reynolds, have met with the company in recent months.
Labour, which is leading in the polls for the general election on July 4, has argued that London should welcome a Shein IPO, as this would bring higher regulatory standards for the company than elsewhere.
Shein faces allegations of forced labor in its supply chain, which the company denies, stating it has a "zero-tolerance policy towards forced labor.
In response to the question about a possible IPO of Shein in London, Reynolds said on Monday: "If they do business in the United Kingdom, we should ideally try to regulate them from the United Kingdom.
If a listing were to be considered, I would want it to happen [in the United Kingdom] because I would know that this would be the way we could enforce the highest standards.
Secretary of State for Economic Affairs Kemi Badenoch said there were issues her party would examine if the company were to go public, pointing to potentially "lost" taxes due to its business model and concerns about forced labor in China.
Junior Economic Minister Kevin Hollinrake, however, said following Badenoch and Reynolds that a Shein IPO "would be a win to have such a listing on the London Stock Exchange.
The requirements for British companies to report on modern slavery in their supply chains could make the company 'more responsible', he added.
Shein and the FCA declined to comment. Reuters was the first to report on the confidential filing.
