Fast-fashion titan Shein is taking a stylish detour to London for its much-anticipated market debut after running into a fashion faux pas in New York, courtesy of regulatory snags and a chilly reception from US lawmakers, according to two in-the-know insiders.
As soon as this month, the online couture purveyor plans to spill the tea to China’s securities watchdog about switching up its initial public offering (IPO) venue and cozy up with the London Stock Exchange (LSE), one source whispered.
Last year, in a swanky fundraising event, Shein was tagged with a whopping $66 billion price sticker, one insider gushed. The fashion juggernaut kicked off the year by schmoozing with London’s financial and legal aces to pencil in a debut on the LSE, revealed the source and another fashion-forward informant.
Adding to the pre-show buzz, Shein has been hobnobbing with London-based fund managers, setting the stage for its runway walk on the financial stage, shared another well-dressed source.
Mum’s the word from both Shein and the LSE, while the China Securities Regulatory Commission (CSRC) kept its lips sealed when asked to comment.
Back in November, Shein tried to sashay into the US market, secretly filing for an IPO and nodding to Beijing for approval, insiders spilled. The US listing is still on the catwalk, but the Singapore-based glam squad is tripping over red tape in both the US and China. US lawmakers have thrown some shade over alleged shady labor practices and rival designers have been suing left and right.
Earlier this year, the CSRC basically told Shein to change its walk, citing iffy supply chain vibes and advising against a US IPO, another source dished.
Now, Shein is strutting toward a London IPO, but don’t be fooled, New York still catches its eye. It plans to keep its US application sparkly and ready, just in case the US regulators start feeling a bit more fashion-forward, hinted another source.
Should the stars align, Shein might even chase a secondary US listing post-London debut, when the political climate gets a bit more runway-ready, added the same source.
With all eyes on them during an election year, Shein’s US IPO dreams are currently stuck in the dressing room, lamented the insiders.
Regarding Beijing’s nod for the London show, Shein plans to loop in the Chinese regulator, which means getting the thumbs up under new listing rules for Chinese companies going public abroad, noted the first and another separate source.
If this IPO struts its stuff, it could be one of the globe’s blockbuster fashion events this year, insiders hint.
For London, this could be a chic comeback after some high-profile names, like UK chip designer Arm, jetted off to New York seeking bigger investment pools. So far, London’s seen a mere four IPOs this year, compared to a bustling European scene.
In a plot twist, despite relocating from Nanjing to Singapore in 2022, Shein still needs Beijing’s blessing for an offshore listing, showcasing its ongoing saga to be seen as a global, not just Chinese, label.
This fashion empire, dishing out affordable threads to over 150 countries, doesn’t own the factories but leans on about 5,400 third-party needle masters, mainly in China, keeping it firmly stitched to CSRC’s new playbook, as reported by Reuters.
Under these rules, which focus on substance over form, a host of other Chinese power players might strut into the IPO approval process, insiders say.
Amidst all this, China’s Cyberspace Administration is peeking into Shein’s cyber closets, reviewing how it handles and shares data about its suppliers as part of the IPO green light process, another source revealed.
