China Fashion giant Shein closer to London listing

Chinese fast fashion firm Shein has filed initial paperwork taking it a step closer to listing on the London Stock Exchange, the BBC understands. The online retail giant, which is based in Singapore but has extensive operations in China, filed the confidential papers with UK regulators recently, according to sources close to the process.

Shein became one of the biggest fashion retailers in the world during the pandemic, but has faced criticism over the environmental impact of its business model. The firm has also come under fire for some of its working practices, which include allegations of forced labour in its supply chain – something the company denies. Both Shein and the UK regulator, the Financial Conduct Authority (FCA), declined to comment on a potential London listing, which could value the company at about £50bn.

A company wishing to sell its shares in the UK must first apply to the FCA for a prospectus containing detailed financial information to be approved. The filing of papers is the first stage of that process and brings the company a step closer to a listing in the UK – selling shares in the business on the London Stock Exchange – but doesn’t necessarily mean it will end up listing there.

In fact, it was initially thought that a listing in the US was the most likely route for Shein after the firm filed papers there late last year, but the move came under close scrutiny from both Republican and Democrat politicians amid concerns about the company’s close links to China.

Some parts of the fashion sector in the UK have urged caution. The British Fashion Council (BFC), which represents companies such as Burberry and Mulberry, said a stock exchange listing for Shein would be “of significant concern to UK fashion designers and retailers”.

“Fashion businesses, including Shein, must embrace corporate due diligence in their supply chains. The BFC would encourage the UK government, the Financial Conduct Authority and the London Stock Exchange to ensure that any business listing in London is an active, responsible leader in this regard and is able to evidence addressing compliance and sustainability concerns in all areas, from worker treatment to material sourcing to citizen engagement in disposable fashion,” said Caroline Rush, the chief executive of the BFC.

Despite the criticism, a potential Shein listing would be seen by many as a big boost for London, which has seen a number of high-profile companies leave the city for the US.

In an interview with the BBC last month, the head of the London Stock Exchange, Julia Hoggett, said the move would ensure the company became more transparent.

“Any company that wishes to put itself through the scrutiny of being on public markets – that is the opportunity for them to raise the bar in the way that they approach their corporate governance and the way they approach investors, and I think that is very much the value that public markets have,” she said. Source: BBCB