The City was gripped today by multi-billion pound hopes for a blockbuster market debut from a big-name global company, in a move that would light up the London stock exchange after its long, hard winter.
Shein – one of the world’s fastest growing and most influential global fashion brands – was reported to be moving nearer listing its shares in the City, by filing paperwork with regulators as soon as this week.
Any such initial public offering (IPO) is thought to worth over £50 billion. A Shein float would be the biggest in London since 2011, when Swiss commodities trading giant Glencore was valued at £36 billion
And it would be big enough to propel Shein into the FTSE 100. If the firm was valued at £51 billion, it would put it in twelfth place on the main stock index. It would slot in just above the operator of the market itself, London Stock Exchange, and just under British American Tobacco.
Joshua Mahony at Scope Markets said: “This deal would add strength to the FTSE 100 brand, indicating that London is an attractive place to list.
“It would add weight at a time when many have been questioning the credentials of the index compared with its US counterparts.”
Such a high-profile arrival could become a major turning point for the City.
Ever since one of its former darlings – Arm Holdings – chose New York over London when it returned to life as a public company worth $55 billion (£43 billion) in 2023, there have been concerns about relatively lower corporate valuations on offer in the UK stock market.
There has been an eye-watering exodus from the market this year. Multinational firms including building products giant CRH and betting powerhouse Flutter have left London for New York. Others chose to delist via private equity. Mergers with overseas companies taking firms under foreign ownership became commonplace.
Recently, firms with a combined market value of around £100 billion were at risk of going or had left, although that figure included the near £40 billion offer for Anglo American from BHP, which fell through last week.
Concern that a collapse in investment from UK pension funds in London-listed shares had drained the City’s pool of capital has led to calls for government action. The issue is likely to be part of the general election campaign.
Shein’s stellar popularity with Gen Z shoppers, known for being equally sensitive for style and price, has made it into the one of the biggest fashion brands in the world since it was founded in Nanjing in 2008 by entrepreneur Chris Xu.
But has also faced controversy over labour practices, including long hours and even forced working, of which it says it has “zero tolerance”.
Russ Mould, investment director at AJ Bell, said: “Shein may find the glare of a public market listing uncomfortable given concerns about its governance, supply chain and business practices. Boohoo’s recent history provides a salutary lesson here.
“Clearly London will want the IPO to be a success to help rebuild its reputation as a listing venue so there’s a lot riding on it for both parties”.
Troubled politics between the US and China are seen as part of Shein’s decision to move toward a City listing. And it previously filed the equivalent paperwork in New York.
Any such arrival of a large and well-known firm on this scale would help restore London’s fortunes at a critical time.
