- Shein plans London IPO, expected to boost FTSE 100
- Political tensions prompt shift from US to UK listing
- Controversy surrounds Shein over working conditions, human rights concerns
When the Chinese online colossus Shein announces that it will float its shares in London, the FTSE 100 is anticipated to receive a boost as soon as the following month.
In the wake of the fashion group’s chairman Donald Tang’s visit to the United Kingdom last month, Labour’s shadow business secretary Johnny Reynolds, and Chancellor Jeremy Hunt have expressed their support for a blockbuster share offer.
Initially, Shein had expressed a preference for conducting an initial public offering in New York, a state known for its significantly higher stock market valuations of online firms.
However, as the political climate for Chinese companies in the United States worsened, it shifted its focus to London.
If the public offering materializes, Shein would immediately ascend to the upper echelons of companies with London listings, with a prospective valuation of £60 billion or more.
The hostile climate towards China in the United States was further emphasized during the previous week when the US Congress approved a measure mandating ByteDance, the owner of Tik Tok based in Beijing, to cease its operations in the United States based on national security concerns. President Biden’s signature on the measure has been indicated.
America is concerned that the social media platform may grant its parent company access to the sensitive information it stores on 170 million users.
Shein, which is headquartered in Singapore, produces the majority of its goods in China and applies cutting-edge technology to transform the most recent fashion trends into new merchandise. The group’s financial foundations, which will be disclosed in a prospectus before the IPO, are currently unknown.
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It acquired its standing as an affordable apparel brand after Chris Xu, an American-born entrepreneur and search engine specialist, established it in 2008 in Nanking. The company exports its products to over 150 countries globally, with the United Kingdom being among its largest markets.
Under the Shein brand, the company procures goods from approximately 6,000 factories throughout China. Time magazine has compared it to the Amazon of the fashion industry.
However, its float in London is certain to generate considerable controversy. Allegations of extended working hours at certain facilities and operations in regions of China where human rights abuses occur have plagued the organization.
However, Tang reportedly felt reassured by his discussions with British politicians and made an extra effort to interact with Labour during his visit to the country.
