Fashion giant Shein is on the verge of secretly filing a London initial public offering (IPO) prospectus with the Financial Conduct Authority (FCA), according to a report from Sky News. If so, it would be one of the biggest IPOs to launch on the UK stock market in the past few years.
Shein has kept secret most of the details of its upcoming public launch but, if true, the company, reportedly valued at around £50 billion (€58.7 billion), could start being publicly traded in summer or early autumn.
Shein turned to the UK stock market after efforts to go public in the US ground to a halt when US politicians raised objections in connection with anti-competitive practices, a possible threat to national security and the alleged use of slave labour to make the products. Shein is being sued by rival Temu over what it alleges are anti-competitive practices.
As far as a proposed UK listing is concerned, even if the prospectus is filed, it is not certain that Shein will end up listing in the UK, as the UK's listing authorities still need to approve the IPO.
If it does go ahead, Shein's IPO could bring fresh life to the London Stock Exchange (LSE), which has seen several companies such as Flutter Entertainment, Arm Holdings and Tui up sticks and announce moves to the US stock market in recent months.
The EU recently signalled it is considering ending tax breaks for Shein, as well as other discount online retailers such as Temu, which include an import tax exemption. The tax break had previously allowed custom duties and checks to be dropped for parcels coming into the EU from abroad, as long as their total value was under €150.
The exemption has been crucial for Shein and Temu to continue selling their goods at such steep discounts, compared with their European counterparts. However, it has also posed a certain risk, as it makes it more difficult to be sure of whether the contents and origin of the parcel meet EU regulations.
Shein accused of anticompetitive practices and forced labour
Temu has recently alleged that Shein engages in anti-competitve practices, such as pushing suppliers to sign exclusivity agreements, as well as filing several copyright takedown notices and threatening Temu sellers.
Shein has also been accused of plagiarising small businesses and designers, such as knitwear designer Bailey Prado, who says her whole life has been copied by Shein.
Prado said in an Instagram post, as reported by Dazed: "I actually found out because one of my followers sent me a screenshot of a design that she recognised was mine. She sent me a link to their newest products and as I was scrolling through, I started to realise this was a whole collection directly copying my pieces.
"I was expecting to find only one of my designs copied. When I saw the whole collection and started recognising each piece, knowing where they came from, I was shocked and didn't feel like it was real. I was simply in shock."
Shein has also faced criticism from the US authorities, for going against the Uyghur Forced Labour Prevention Act, by not declaring that it was sourcing cotton from Xinjiang for its items. The Chinese government and several businesses are accused of exploiting the minority and predominantly Muslim Uyghur community for forced labour in the Xinjiang region, causing a number of Chinese companies to be blacklisted by the US.
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