Companies
October 3, 2024
Border
Less than
min read

Shein Moves Toward London IPO Amid Regulatory Scrutiny

Shein is preparing for a London IPO by holding informal investor meetings, despite facing regulatory hurdles in both the UK and China. The fast-fashion retailer, previously valued at $66 billion, must navigate questions about its business model and environmental record while addressing European government concerns over tax exemptions.
Shein Moves Toward London IPO Amid Regulatory Scrutiny

Chinese-founded online retailer Shein is advancing plans for a potential London IPO, scheduling informal investor meetings across Europe as it awaits approval from the UK Financial Conduct Authority (FCA). The company confidentially filed for a London listing earlier this year after its plans for a New York IPO fell apart due to opposition from U.S. lawmakers and supply chain issues flagged by Chinese regulators. If successful, Shein’s listing would offer a much-needed boost to London’s struggling IPO market, which has seen a sharp decline in new listings this year.

Shein’s business, known for low-cost fashion items, has come under increased scrutiny regarding its labor practices and environmental impact. The company must not only secure regulatory approval in both the UK and China but also convince global institutional investors of its financial stability, having reported an estimated net profit of $2 billion last year, more than double from the previous year. Analysts and investors remain cautious, given the challenges Shein faces in maintaining profitability and navigating regulatory demands.

Additionally, Shein is facing political pressure in Europe. Several European governments, including Germany and France, have called for tighter enforcement of the European Union’s online platform standards and suggested scrapping tax exemptions on low-cost parcels. The removal of these tax breaks could significantly impact Shein's profitability, further complicating its path to a successful IPO.

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