Shein’s listing plan of £53bn is a boost for London

The fast-fashion retailer Shein has accelerated its plans to float a record breaking in London.

Reports claim that the Chinese-founded online retailer chose London as its listing location, after deciding against New York due to tensions between China & US.

Shein is a Singapore-based company that plans to inform China’s securities regulator about the change in stock market venue. It will also file its intention to float on London this month.

A second Shein source stated that, while the timing is optimistic, the company wants to complete its London float before the end of the calendar year.

Sky Xu, its founder who is not known for his public persona, visited London to discuss plans. Company representatives were treated warmly by officials at the Treasury, Department for Business, and No 10. This was in stark contrast to the hostile reception received by its US operations, which are largely Chinese.

Donald Tang, a Chinese-American born in America, is the executive chair of the company. In recent weeks, he has also been to London.

JP Morgan, Goldman Sachs, and Morgan Stanley bankers are working on this blockbuster listing, along with an army lawyers, accountants, and other advisers. They stand to benefit from a fee bonanza worth at least $600,000,000 (£480,000,000) if it goes through.

Donald Tang, Shein’s Executive Chairman, was in London last week to drum up support for the company’s IPO.

The City would benefit from this, as London has been lagging behind other exchanges in New York, Amsterdam and elsewhere in terms of attracting companies to list. CVC, a private equity firm that has been one of the most popular floats over the past few years, listed in Amsterdam its shares last month. Meanwhile, British tech giant Arm, valued at $55 billion, was valued in New York after it listed last year.

Bloomberg data shows that only 2 percent of the $11.9 billion raised in Europe by floating securities in Europe this year was raised in London. This is well below the average 31 percent between 2012 and 2023.

New York is a better place to list companies, including the betting company Flutter Entertainment (owner of Paddy Power) and the building materials firm CRH.

Sources in London hope that a rise in the FTSE 100 will be a sign that investors are becoming more interested in London-listed stocks. The main index reached a new record high last week of 8,433,76. While the FTSE 250, which is regarded to be a better gauge of UK companies, is not at a record level, it is up more than 5% this year. London is experiencing a wave of mergers, including the $39 billion offer for Anglo American. City sources believe that this could help boost valuations.

A London float for Shein could also cause controversy, especially among environmentalists who are concerned about the waste generated by fast fashion.

Workers in a factory located in China produce clothes for Shein. The company has experienced rapid growth and now generates profits of over $2bn.

Reuters reported, despite Shein’s plans to request permission from the China Securities Regulatory Commission to change the venue of its listing, the company still preferred New York. It would continue to work to overcome political obstacles there.

It is said that it has approached London-based fund manager ahead of an IPO as part of its preparations.

Shein needs permission from Chinese authorities due to new rules that apply to companies wishing to list their shares in countries outside of China.

The company has experienced rapid growth since its creation by Xu, in 2012. Last year it made net profits worth $2 billion on sales of $45.9 billion. Xu relocated the company to Singapore in 2020 in an effort to distance the company from its Chinese roots. Sensor Tower, a market intelligence company, estimates that 171 million people regularly use the app.