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Shein Prepares for London IPO with Investor Presentation Enhancements

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Shein Prepares for London IPO with Investor Presentation Enhancements

Shein is poised to initiate informal discussions with investors in the coming weeks as part of its anticipated initial public offering (IPO) in London. The fast-fashion leader is ramping up its preparations while awaiting approval from UK regulatory bodies.

A source close to the matter informed Reuters that the Chinese online retailer intends to conduct informal roadshows across Europe. These sessions will allow Shein to engage with significant investors, answer their queries, and gauge their interest in providing financial backing.

The company hopes to launch its IPO this quarter, pending the necessary clearance from the Financial Conduct Authority (FCA), as highlighted by another individual familiar with the situation.

As Shein, known for its affordable $5 tops and $10 dresses, prepares for its market debut, it is facing increased scrutiny regarding its labor practices and environmental policies.

The ability of this fast-fashion giant to convince major institutional investors globally about the sustainability of its business model and financial health will be critical in determining if it can match last year’s valuation of $66 billion.

Shein’s potential London listing follows previous efforts for a US IPO that met substantial regulatory hurdles in both China and the United States, along with pushback from American officials.

The retailer’s aspirations for a stock offering in London hinge on receiving approval from the China Securities Regulatory Commission (CSRC), though it remains uncertain whether any guidelines have been shared by the Chinese regulatory body.

As of Thursday, a review of the CSRC’s website, which lists candidates approved for offshore IPOs, did not reveal Shein among them.

While Shein’s financial data is not publicly disclosed, Bernstein analysts estimated in April that the company’s net profit soared to $2 billion last year, a significant increase from $700 million.

The proposed Shein stock offering could serve as a timely uplift for London’s languishing IPO market. According to Dealogic data, the UK has recorded only nine new listings this year, a decrease from 18 in 2023.

This positions the UK behind other nations in Europe, ranking it 10th in terms of IPO value across Europe, the Middle East, and Africa.

Nevertheless, the retailer has faced considerable backlash from industry leaders who raise concerns over its use of a legal tax loophole for international shipments, which they argue gives Shein an unfair competitive edge.

Image Source: Yau Ming Low / Shutterstock

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