Fast-fashion powerhouse Shein is reportedly planning a Hong Kong initial public offering (IPO) after failing to gain approval from Chinese regulators for its London listing.
The company, headquartered in Singapore, intends to file a draft prospectus with the Hong Kong stock exchange in the coming weeks, as per Reuters, as reported by City AM.
This development comes as a disappointment to the London Stock Exchange, which had been wooing the e-commerce giant for what was expected to be the largest listing of the year, raising hopes of rejuvenating the market following a lack of flotations. If successful, Shein plans to go public within the year.
The fast fashion firm had initially planned to list in London in the first half of 2025. However, despite gaining approval from the UK’s Financial Conduct Authority (FCA), it later encountered problems with the China Securities Regulatory Commission.
The company recently ended its partnership with two London-based PR firms it had hired to guide the London float, indicating early signs that it was abandoning its plans.
The CSRC was reportedly worried that issues with Shein’s London IPO could cause embarrassment for the Chinese government.
China troubles for Shein
Earlier this year, the China-founded firm made headlines when a representative declined to clarify whether its clothes were made using any Chinese cotton.
Shein has been called into question over allegations of using forced labour in its supply chain and obtaining cotton from Xinjiang province in China, where the Uyghur minority is reportedly subjected to persecution and forced labour, according to human rights organisations.
The Uyghur rights group Stop Uyghur Genocide has announced intentions to seek a judicial review of Shein’s IPO if it proceeds in London.
Initially, Shein had considered a New York listing, but due to intense pressure from US legislators concerning the company’s labour practices, the plan was abandoned.
Kathleen Brooks, research director at XTB, suggested that Shein’s shift away from a London listing could be a “blessing in disguise”.
Brooks remarked on the political implications of the listing’s relocation, saying, “Apparently, the Chinese regulator insisted the listing was moved from London. This suggests that it was becoming political, which is usually problematic in the long term.”
She also noted the resilience of the UK market, stating, “The fact that the FTSE 100 has barely budged on this news and remains within touching distance of an all-time high, is a sign that the Shein listing was never priced into the UK market and the fact it is now listing in Hong Kong is unlikely to have an impact on the FTSE100.”
