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Online fashion giant Shein to file prospectus for £50bn London float

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Shein, the online fashion behemoth, is on the verge of taking a huge stride towards a London flotation that would value it at about £50bn and rank among the most significant – and contentious – deals in the UK’s capital markets for years.

Sky News can exclusively reveal that Shein, which was founded in China but is headquartered in Singapore, is preparing to file a prospectus with the Financial Conduct Authority for approval ahead of its potential float.

City sources said on Sunday evening that the confidential filing could take place as soon as the coming week, although it could yet take place later this month.

The milestone in the listing process would be the clearest sign so far that Shein, which owns the British fashion brand Missguided, is to become London’s most high-profile public float for more than a decade.

The timing of the filing does not necessarily indicate when an initial public offering would take place, although some observers believe a summer or early autumn stock market debut in London remains on the cards.

Shein had initially targeted a New York listing but has been beset by political opposition which has resulted in a lukewarm reception from regulators.

By contrast, Sky News revealed earlier this year that Donald Tang, Shein’s executive chairman, had met Jeremy Hunt, the chancellor, earlier this year, alongside other ministers and executives from the London Stock Exchange.

The meeting between Mr Hunt and Mr Tang underlined the importance that British officials are attaching to the idea of trumping the US in an effort to land the Shein IPO.

Mr Tang is also understood to have spoken to a number of frontbench Labour politicians, including Jonathan Reynolds, the shadow business secretary in recent months.

The filing of a prospectus with the FCA does not guarantee that the company will list in London, with a final decision subject to meetings with fund managers and the approval of listing authorities in the UK.

However, people close to the process said it represented a significant moment that meant a City float for Shein was now highly likely.

Image:
A Shein advert on the London Underground. Pic: Reuters

Shein has been at the centre of controversy over its use of cotton from the Xinjiang region of China and other issues related to workers’ rights and its vast supply chain.

If it does proceed with a London listing, Shein is expected to seek to raise over £1bn from the sale of new shares to investors.

This would, however, be relatively modest in the context of an anticipated valuation of £50bn or more.

The company was valued at $66bn in its last funding round early last year.

Last month, Sky News revealed that Sajid Javid, the former chancellor of the exchequer, has been approached about taking a role at Shein.

If the discussions proceed, they could see him either join Shein’s board or become an adviser to the Chinese-founded company.

Shein could be responsible for staging the London Stock Exchange’s second-largest IPO in history, behind the 2011 stock market debut of Glencore International, the commodities trading and mining group.

Goldman Sachs, JP Morgan and Morgan Stanley are advising on the deal.

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Founded in China in 2012, Shein was valued at over $100bn in 2022, at which point it was worth more than H&M and Zara’s parent company, Inditex, combined.

It operates in more than 150 countries and boasts 150m users globally.

The LSE’s efforts to court Shein come during a challenging period for the City as a listing venue for large multinationals, with ARM Holdings, the UK-based chip designer, opting to float in New York rather than London.

Other companies, such as the gambling operator Flutter Entertainment and tour operator TUI, have shifted their listings away from London, citing higher valuations and more liquid markets.

In recent weeks, however, London has landed the prospective IPOs of Raspberry Pi, the personal computer maker, delivering a boost to the City.

Last month, Mr Hunt hosted a summit at Dorneywood attended by technology companies such as Raspberry Pi and Monzo, the digital bank valued at over £4bn, as part of efforts to encourage them to list in the UK.

Shein declined to comment on Sunday night.

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