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Fast fashion company Shein is considering the possibility of moving its initial public offering from New York to London because of hurdles to listing in the U.S., according to people familiar with the matter.
Shein, which was founded in China but is now headquartered in Singapore, is in the early stages of reviewing the London option because it considers it unlikely that the U.S. Securities and Exchange Commission will approve the IPO, the people said asked not to be identified discussing confidential information.
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Shein is still working on his application to list the U.S. as his preferred location, the people said. They added that they would have to submit a new overseas listing application to Chinese regulators if it decided to move to London or elsewhere. Other venues such as Hong Kong or Singapore could also be considered, two of the people said.
A representative for Shein declined to comment.
A London listing would be a potential boon for the beleaguered market after one of the worst IPO years in its modern history. According to data compiled by Bloomberg, IPOs in the United Kingdom raised nearly $1 billion last year, the lowest level in decades.
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The United Kingdom is also struggling to curb the migration of companies to the United States and elsewhere. Chip designer Arm Holdings Plc rejected London last year for a New York initial public offering, despite the British government's push for a domestic listing of the Cambridge, England-based company. Already listed companies are moving abroad, with TUI AG shareholders voting earlier this month to delist from the London Stock Exchange and shift trading mainly to Germany.
Small and rare
U.S. IPOs of Chinese companies have been largely small and rare in the years since Didi Global Inc. was forced off its board in New York. This was part of a crackdown that essentially closed the market to first-time share sales by Chinese companies. Amer Sports Inc.'s $1.6 billion offering in February was the largest China-backed IPO to tap the U.S. market since Didi raised $4.4 billion in 2021, and the first in grossed more than $200 million at that time.
Shein came under US scrutiny. Senator Marco Rubio, among other things, called on the SEC to block the company's listing, saying the company needed to disclose more about its activities in China. Last year, a member of the US Congress called for an investigation into Shein's cotton shipments from Xinjiang. Trade tensions between the USA and China have also been simmering for years.
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Shein, a pioneer of ultra-fast fashion with items like shirts and swimsuits for as little as $2, filed for a U.S. initial public offering last year, aiming for a valuation of $80 billion to $90 billion, people familiar with the matter said at the time. Private trades at the end of 2023 valued the company significantly lower, at around $50 billion.
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