Jeremy Hunt has met the boss of Shein in an attempt to persuade the fast fashion retailer to float on the London stock market, as it emerged the company has run into potential problems with a listing in the US.
The UK chancellor met Donald Tang, the Shein executive chair, this month to discuss a potential initial public offering (IPO) in London, and the discussions were “productive”, Sky News reported.
A Treasury spokesperson said: “We have developed reforms to boost the UK as a destination for IPOs, including making it easier for companies to list more quickly.
“The government does not comment on individual companies – it is for individual firms to decide where to list.”
Shein, which was founded in China but is headquartered in Singapore, is in the early stages of exploring a London listing because it believes it is unlikely that the US Securities and Exchange Commission would approve its initial public offering (IPO), Bloomberg reported.
If it were to go ahead it would be one of London’s biggest ever corporate listings and a potential boost to the country’s standing as a global financial centre, after a number of companies snubbed the London Stock Exchange in favour of the Nasdaq in New York, despite the UK government’s efforts to persuade more firms to list there.
Indivior, which makes opioid addiction treatments, said last week that it was sounding out shareholders over plans to move its primary share listing to the US this year. Earlier this month, the Anglo-German travel company Tui said it would ditch its share listing in London, after shareholders voted overwhelmingly for a sole listing in Frankfurt. The Tui chief financial officer, Mathias Kiep, said there had been a shift in liquidity from London to Frankfurt.
The Cambridge-based chip designer Arm, whose chips power nearly every smartphone and which is owned by Japan’s SoftBank, opted for a listing on New York’s Nasdaq last year along with other tech companies, in a snub to Rishi Sunak’s government, which had tried to persuade the company to float in London.
About $1bn (£790m) was raised in the UK through IPOs last year, the lowest level in decades, according to data compiled by Bloomberg.
Shein is still working on its application to list in the US, Bloomberg said, and would need to file a new overseas listing application with Chinese regulators if it decided to switch to London or elsewhere. Other potential locations for a listing include Hong Kong and Singapore.
In November, the company lodged confidential paperwork with US securities regulators, informing them of its intention to go public in the US.
The listing would be one of the largest IPOs in years.
Shein is one of the global leaders of fast-fashion e-commerce, harnessing a network of small-shipment manufacturers in China, and has a massive online advertising presence. It was founded by the mysterious billionaire Xu Yangtian, also known as Chris Xu, in Nanjing in 2008.
Danni Hewson, head of financial analysis at AJ Bell, said: “Having one of the most disruptive names in retail float in the UK would certainly do wonders to help fix the London Stock Exchange’s damaged reputation as a listing venue. Shein is now a household name in many parts of the world and the go-to website for teenagers and young adults seeking bargain clothes.
“Investor interest could be huge, which bodes well for attracting other names to list in the UK after a patchy spell that has seen a growing number of big stocks turn to the US as their main stock location.
“Shein wants to be seen as a global business and having a Western stock listing rather than one in China would position it differently in the eyes of investors. It would imply greater stock liquidity and higher levels of transparency and corporate governance.”
Shein declined to comment.
