Shein is set to commence early, informal meetings with investors in the upcoming weeks for its anticipated initial public offering (IPO) in London, as the fast-fashion powerhouse accelerates its preparations while awaiting approval from UK regulators.
According to a source familiar with the situation who spoke to Reuters, the Chinese online retailer plans to conduct informal roadshows mainly across Europe. These events will allow the company to field questions from significant investors and assess their interest in contributing capital.
Shein aims to initiate its IPO within the current quarter, contingent upon receiving the necessary clearance from the UK’s financial regulator, the Financial Conduct Authority (FCA), as reported by another source with knowledge of the matter.
However, as the company, recognized for its $5 tops and $10 dresses, gears up for its market introduction, it faces increasing scrutiny regarding its labor policies and environmental practices.
The ability of the fast fashion giant to persuade major institutional investors worldwide about the viability of its business model and financial stability will be crucial in determining if it can replicate last year’s valuation of $66 billion.
Shein’s efforts for a potential listing in London come in the wake of its previous attempts at a US IPO, which encountered numerous regulatory obstacles both in China and the US, along with resistance from American authorities.
As of Thursday, a check of the CSRC website, which catalogs approved candidates for offshore IPOs, did not show Shein’s name.
While Shein’s financial specifics are not publicly available, analysts at Bernstein estimated in April that the company’s net profit surged to $2 billion last year, up from $700 million.
The proposed Shein stock offering could provide a much-needed boost to London’s stagnating IPO market. Dealogic data indicates that the UK has recorded just nine new listings this year, compared to 18 in 2023.
This places the UK behind other European countries and ranks it 10th among the venues for listings in Europe, the Middle East, and Africa when evaluating IPO value.
Nevertheless, the retailer has been met with significant criticism from industry leaders who are concerned about its exploitation of a legal tax loophole for overseas shipments, which critics argue gives the company an unjust advantage.
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