Shein Contemplates Shifting IPO Venue from New York to London

The popular fast-fashion retailer Shein is contemplating relocating its massive initial public offering (IPO) from New York to London, as reported by Bloomberg on Tuesday.

Background and Current Status

Founded in China and currently headquartered in Singapore, Shein filed confidentially for its IPO last year with a reported valuation target of $80 billion to $90 billion. While the preference remains to list in the US, concerns over potential rejection by the US Securities and Exchange Commission (SEC) have led Shein to explore alternative options, including London, Hong Kong, or Singapore, according to sources familiar with the matter.

Potential for Record-breaking IPO

If Shein achieves its desired valuation of $90 billion, even a modest 10% of its shares going public could result in a staggering $9 billion raised. This would position Shein as one of the largest IPOs in history, trailing closely behind Porsche’s $9.1 billion IPO in 2021.

Challenges and Scrutiny

Shein’s IPO plans in the US have encountered obstacles, primarily from lawmakers concerned about the company’s supply chain practices and ties to China. Amid allegations of forced labor in its supply chain, US lawmakers have advocated for a delay in Shein’s public offering until its sourcing practices are thoroughly investigated. Additionally, Republican Senator Marc Rubio has called upon the SEC to demand greater transparency from Shein regarding its operations and connections with the Chinese Communist Party.

Response from Shein

Despite mounting scrutiny and calls for transparency, Shein has maintained its stance, repeatedly asserting that it does not engage with manufacturers in Xinjiang, a region associated with human rights controversies. However, Shein has yet to provide detailed comments or responses to inquiries from Business Insider regarding these issues.

Conclusion

As Shein weighs its options for its IPO venue, the decision will have significant implications for the company’s future trajectory and global standing. With the potential to break records in the IPO market, Shein faces both opportunities and challenges as it navigates the complex landscape of international finance and scrutiny over its supply chains.