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Shein “Steps Up Plan for London IPO” in ace of obstacles with US listing

The Singapore-based online fashion store, which was started in China, is reportedly under more scrutiny than anticipated but would like to float in New York. According to individuals who spoke to Reuters, the fast-fashion retailer Shein is intensifying plans for a London listing after encountering regulatory obstacles and resistance from US politicians during its effort to go public in New York.

According to one source, the online clothes retailer intends to file with the London Stock Exchange (LSE) and notify China’s securities regulator about the change in the venue for the initial public offering (IPO) as soon as this month. Prior to the anticipated float, the fashion brand, which was established in China but is currently headquartered in Singapore, has also requested initial talks with fund managers in London, according to a second source with firsthand knowledge of the situation.

The source and another person with knowledge of the situation stated that Shein, which one source estimated at $66 billion (£52 billion) in a fundraising last year, began corresponding with the financial and legal experts in London early this year in order to investigate a listing.
The LSE declined to respond, as did Shein. A request for comment from the China Securities Regulatory Commission (CSRC) was not answered. Sources claim that in November, Shein approached the CSRC to request Beijing’s approval after filing a private application for an initial public offering (IPO) with the US Securities and Exchange Commission (SEC).

Officially, a US IPO is still on the table, but the Singapore-based business has been having trouble getting past regulatory obstacles in both China and the US due to litigation from rivals and complaints from US politicians regarding alleged labor violations. According to a different source, the CSRC informed Shein earlier this year that because of the company’s supply chain issues, the regulator would not advise a US IPO.  According to the second source, Shein is currently preparing for a London float, but it still wants to list in New York and intends to maintain its SEC application in case US regulators change their minds.

After its London IPO, if and when it decides the US political environment is more favorable, it might also pursue a secondary US listing in New York, the second person continued.
In February, Senator Marco Rubio, a Republican, requested that the SEC prevent Shein from going public in New York unless the online retailer provides more information about its business practices and the “serious risks of doing business” in China. US regulators have been more scrutinizing of the corporation than anticipated during an election year. The two individuals claimed that the SEC had not yet advanced Shein’s IPO filing, a sign of the delicate nature of the application procedure.

A request for comment from the SEC was not answered. If it happens, the IPO might rank among the biggest worldwide this year, according to sources. Following the decision by businesses like UK chip designer Arm to list in New York in an effort to increase liquidity, it might signal a turning point for London. Just four of the 30 IPOs that have occurred in Europe this year have happened in London.

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