Online fast-fashion retailer Shein is gearing up for its London initial public offering (IPO) by scheduling informal investor meetings in the coming weeks, according to sources familiar with the matter. The company is moving forward with preparations while awaiting regulatory approval from the UK’s Financial Conduct Authority (FCA).
Informal Investor Roadshows Set to Begin
Sources indicate that Shein plans to hold informal roadshows, primarily across Europe, where the company will engage with large investors to gauge their interest and address questions. These pre-IPO meetings are a critical step in building momentum ahead of the potential listing. Shein confidentially filed for the London IPO in June, marking its shift from an initial New York listing, which was derailed due to opposition from U.S. lawmakers.
Awaiting Regulatory Approval
Shein’s listing in London is expected to take place in the current quarter, contingent upon FCA approval. However, the retailer also requires clearance from the China Securities Regulatory Commission (CSRC), as it continues to face regulatory challenges related to its supply chain. It remains unclear whether Shein has received guidance from Chinese authorities.
Challenges and Scrutiny Over ESG Practices
As Shein advances its IPO plans, it faces increasing scrutiny over its labor practices and environmental impact. The fast-growing retailer, known for its affordable clothing, must convince global institutional investors of its financial health and long-term sustainability if it hopes to meet the $66 billion valuation achieved in a fundraising round last year.
A Boost for London’s Struggling IPO Market
Shein’s move to list in London could revive the UK’s lackluster IPO market, which has seen only nine new listings this year, compared to 18 in 2023. The UK’s IPO market trails other European nations, and Shein’s public offering would offer a much-needed boost to the London Stock Exchange amid post-Brexit challenges.
Regulatory Pushback from Europe
In addition to its regulatory hurdles, Shein is also facing pushback from several European governments, including Germany, France, and the Netherlands, which are urging the European Union to enforce stricter standards on online platforms like Shein. A key concern is the removal of “de minimis” tax breaks, which exempt parcels worth less than €150 from duties. The removal of these tax breaks could hurt Shein’s profitability, raising concerns among potential investors.
Shein’s successful London debut will depend on its ability to navigate regulatory approval, address environmental, social, and governance (ESG) concerns, and secure investor confidence in a challenging market environment.
