The logo of fast fashion e-commerce company Shein outside its office in Guangzhou in southern China’s Guangdong province.
Jade Gao Afp | Getty Images
Shein is set to hold informal investor meetings in the coming weeks for its planned London initial public offering, three sources familiar with the matter said, moving ahead with preparations as it awaits UK regulatory approval.
The China-founded online retailer plans to hold informal roadshows mainly across Europe, one of the sources said, during which the IPO company fielded large investor inquiries and tested their investment appetite.
The source was not identified because he was not authorized to speak to the media.
A spokeswoman for Singapore-based Shein declined to comment.
Shein secretly filed papers with Britain’s market regulator in early June, kicking off the process for a potential London listing by the company later in the year, Reuters reported in June, sources said.
The company, valued at $66 billion last year in a fundraising round, began considering a London IPO earlier this year after initial New York plans stalled following opposition from US lawmakers.
Shein is looking to launch a float in the current quarter, subject to approval from Britain’s market watchdog, the Financial Conduct Authority, a separate source familiar with the matter said.
As Shein, known for $5 tops and $10 dresses, moves into the market debut, the treatment of workers and environmental record has come under increased scrutiny.
The fast-growing company’s ability to convince large global institutional investors of its business conditions and financial health will determine whether it can match the $66 billion valuation it achieved last year.
Shein’s preparations for a potential London listing mark a shift from its long-held U.S. IPO plans, which have faced obstacles at home and abroad, Reuters reported.
The group secretly filed for an IPO with the US Securities and Exchange Commission in November and simultaneously sought approval from China’s securities regulator, sources said.
However, the China Securities Regulatory Commission told Shein earlier this year that it would not recommend a US IPO due to the company’s supply chain problems, Reuters has reported.
Shein’s London stock listing plan still needs CSRC approval, and it remains unclear whether the company has received guidance from Chinese regulators.
On Thursday, a review of the CSRC website, which publishes approved offshore IPO candidates, did not mention Shein.
Shein’s financial figures are not publicly available, but analysts at Bernstein in April estimated net profit more than doubled last year to $2 billion from $700 million, giving a profit margin of 4.4% of sales.
The Shein share offering will be a boost to London’s moribund IPO market.
The UK has just nine new listings this year against 18 in 2023, according to Dealogic data. It lags other European countries, and ranks 10 among places for listings in Europe, the Middle East and Africa in IPO value.
Britain’s market watchdog this summer fast-tracked new rules to facilitate and encourage companies to list on the London Stock Exchange as they seek to join New York and the European Union after Brexit.
Shein faced pushback from several governments in Europe, with Germany, Austria, Denmark, France and the Netherlands writing a joint letter last week asking EU authorities to impose the bloc’s standards on online platforms and expressing support for removing the duty exemption. the parcel costs less than 150 euros.
Eliminating those “de minimis” tax breaks could hurt Shein’s profits, investors said.
