Shein, a Chinese-founded fast-fashion online retailer, doubled its profit in Britain, and overtook Boohoo, before a planned blockbuster London float.
According to new accounts filed at Companies House, Shein UK’s pre-tax profit rose from £12.2 to £24.4 in the year ending December. It paid £5.7 in income tax.
Singapore-based retailer, who is looking at a flotation on the London Stock Exchange reported revenues that rose from £1.12 to £1.55 during the same time period. The UK sales of Boohoo Group’s competitor were £1.09billion last year.
Shein’s rise, which began in Nanjing, China, in 2012, put pressure on the fast-fashion competitors in Britain, such as Asos and Boohoo . The company sells cheap clothes, with some as low as 39p. It ships directly from China to customers in Britain and America. The company’s low prices have drawn younger customers, but its business and environmental ethics have also been criticized.
Shein , the owner of Missguided and Boohoo, said that setting up an online retail base in Manchester was a “milestone”. The online retailer also opened temporary stores in other cities including Liverpool to showcase its best-selling collections.
The UK company had 33 employees in the UK last year. They were mainly involved in marketing. But the new office can pave the path for a larger team to be recruited and expansion throughout the country.
Shein had hoped to list in America, but the US Securities and Exchange Commission informed the company that it would not accept its application unless the company submitted a public filing. Shein didn’t like the expected glare and is looking to list somewhere else, London being a top candidate.
In the next few weeks, the retailer will hold informal investor meetings for the planned IPO. During these meetings, an IPO-bound firm will answer investors’ questions and test their investment appetite.
A potential flotation of the company would be valued at £50.3billion, making it the largest deal on the London Stock Exchange for the past decade.
The plans , however, have raised concerns over its environmental, social, and governance credentials. This includes its labour and supply-chain policies. A number of senior politicians have stated that the listing should be scrutinized more closely, and retailers have claimed that Shein is able to offer a cheaper price for British consumers by avoiding VAT and duty.
Julian Dunkerton is the founder of Superdry, a struggling fashion retailer. He said that Shein, and other online giants, should be made to pay more taxes, “or British bankruptcy will occur and tax revenue will be reduced”.
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