Online fast-fashion retailer Shein has secured approval from Britain’s Financial Conduct Authority (FCA) for its planned initial public offering (IPO) in London, according to two sources with knowledge of the matter.
Shein Secures FCA Approval for London IPO
The FCA’s approval marks a significant step forward in the China-founded company’s pursuit of a London listing after it confidentially filed papers with the British regulator last June.
However, Shein will also have to contend with market turmoil caused by US President Donald Trump’s 145 per cent tariffs on Chinese goods and tighter rules on duty-free shipments from China to the US.
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Shein’s Path to London Listing
Shein, which sells US$10 dresses and US$12 jeans in more than 150 countries and was valued at US$66 billion in its last fundraising round in 2023, will also need to secure approvals from Chinese regulators, notably the China Securities Regulatory Commission (CSRC), for the London float, sources have said.
The company in recent weeks informed the CSRC of the FCA’s approval but has yet to receive a green light from the regulator, said one of the sources. They declined to be named as the information remains private.
Challenges Ahead
Shein, whose clothes are produced at thousands of factories mostly in China, last year sought Beijing’s approval to go public in London, despite the company having moved its headquarters from Nanjing, China, to Singapore in 2022.
Shein’s filing with the CSRC makes it subject to Beijing’s new listing rules for Chinese firms going public offshore, sources have said.
Shein does not own or operate any manufacturing facilities, and instead sources its products from around 5,800 third-party contract manufacturers mainly in China, subjecting it to the CSRC’s listing rules, a separate source said previously.
‘De Minimis’ Issues
Shein, founded by China-born entrepreneur Sky Xu, initially aimed to go public in London in the first half of this year, contingent on securing approvals from regulators in both the UK and China, Reuters reported in January.
But its prospects have come under a cloud in recent months as the Trump administration moved to end the “de minimis” duty exemption, which allows shipments worth less than US$800 duty-free entry to the US and has helped Shein keep prices low.
Conclusion
Shein’s path to a London listing is not without its challenges. The company will need to navigate the complexities of Chinese regulation and market turmoil caused by the Trump administration’s tariffs on Chinese goods. However, with its FCA approval in hand, Shein is one step closer to achieving its goal.
Frequently Asked Questions
Q: What is Shein’s valuation in its last fundraising round?
A: Shein was valued at US$66 billion in its last fundraising round in 2023.
Q: What is the impact of the de minimis termination on Shein’s business?
A: The termination of the de minimis duty exemption could force Shein to hike prices in the US, its biggest market, although the company has sought to adapt by adding suppliers in Brazil and Turkey.
Q: What is the current status of Shein’s IPO?
A: Shein has secured FCA approval for its planned IPO in London, but it still needs to secure approvals from Chinese regulators and navigate market turmoil caused by the Trump administration’s tariffs on Chinese goods.
