Shane is a big deal.
In 12 years, the Chinese fast fashion giant has exploded in size and now spans more than 150 countries. His $5 dresses and accessories have caught the attention of young shoppers who want more for less.
As Shane grew, he became the focus of attention among American lawmakers. The company initially planned to list in the US but has since shifted its focus to London, where it is said to be planning to list in the coming weeks.
Although Shein has not officially announced a date, its possible IPO would be the most high-profile in London in recent years.
What do we know about IPOs?
This will happen very soon and will probably happen in London.
Singapore-headquartered Shein is preparing to file a prospectus for its IPO, which could be valued at around 50 billion pounds ($63.7 billion). Sky News reported Sunday. This could become public knowledge as early as this week.
Shein was preparing to list in the United States but faced challenges over the company’s alleged use of cotton from China’s Xinjiang region, home to ethnic minorities including Uighurs. The company says it has a zero-tolerance policy against forced labor.
Environmental practices have also become a reason caring for countries who consider them unstable.
The online retailer tried to move quickly by seeking a London listing, but may have found those problems continue to make life difficult, suggests AJ Bell’s Russ Mold.
“Shane may not be comfortable with a public market listing given concerns about its governance, supply chain and business practices,” he said in a note Monday.
Allen J. Schaben – Los Angeles Times/Getty Images
Why does this matter?
Shein’s share placement has been expected for a long time and could become one of the most significant in the history of the retail sector. This will certainly be one of London’s biggest IPOs in recent memory since commodities company Glencore’s IPO in 2011.
In 2022, the company was valued at 100 billion dollarssurpassing Inditex, the parent company of H&M and Zara, in total size.
This is driven by Gen Z’s strong appetite for affordable clothing and Shane’s astute use of social media to attract users – be it in the US, UK or elsewhere.
“Shane has capitalized on the growing popularity of online fashion shopping among young British women and is now a key competitor in the UK’s young fast fashion world,” Tamara Sender Ceron, Associate Director of Fashion and Retail. Analytics company Mintel said that in the 2022 report.
What will Shein’s IPO mean for London?
If Shein lists its shares in London, it would be a good time for the British markets. In recent years, a number of companies have either delisted from the London Stock Exchange or decided to list elsewhere, largely due to concerns that they were undervalued. Arm, the British chip company, is a particularly notable example of a large IPO that ideally could have been led by London but was not.
Seeking to avoid a repeat of this, representatives of Britain’s opposition Labor Party, which is expected to win the country’s general election next month, recently held talks with Shein executive chairman Donald Tang in hopes of pushing the company to list there. London Times reported.
Given its size, the company’s IPO would give London a much-needed vote of confidence, but that doesn’t mean Shein won’t be subject to further scrutiny. legislators recently also calls for an audit of the company.
Of course London is calling, but Shane won’t necessarily answer. “The question for UK traders is whether it will [Shein filing its prospectus] lift the FTSE 100 index after the index fell 0.77% last week. If it does happen this week, London will be one step closer to becoming the site of Shane’s IPO,” Kathleen Brooks, director of research at XTB, said in a note.
As for Shein herself, whether you’re a fan of the fast fashion firm or not, there’s no doubt that her listing will be a major retail event. If the IPO goes smoothly, it could help the company gain more confidence among investors, regulators and buyers, not to mention further capital growth.
Whether this will be enough to fend off the bad press and let cheap fashion speak for itself remains to be seen.