Shein Shifts Focus to London After New York IPO Stalled - Latest Global News

Shein Shifts Focus to London After New York IPO Stalled

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Shein is targeting a London IPO in the coming months as tensions between Washington and Beijing stall the online fashion giant’s plans for a blockbuster IPO in New York.

In an interview with the Financial Times, Chief Executive Donald Tang said the Singapore-based company had made “progress” in changing the perception that China controlled Shein, “but not enough” to win over U.S. lawmakers.

Concerns about Shein’s ties to Beijing have become the biggest hurdle on the way to a U.S. initial public offering, for which the company filed preparatory documents with the Securities and Exchange Commission six months ago.

Several people familiar with the company’s thinking said it had begun to prioritize its backup plan for a U.K. initial public offering.

Tang declined to confirm the possibility of a London listing, saying the on-demand e-commerce group, which was valued at $66 billion in its latest funding round, has not yet agreed on a listing location have. “We want to explore all options,” he said. “No decision has been made yet.”

An IPO on the scale of Shein would be a coup for the London Stock Exchange, which has lost listings to its larger and more liquid New York rivals, the New York Stock Exchange and Nasdaq.

London has lost touch with high-profile stock exchanges in recent years, including Cambridge-based chip designer Arm Holdings. It has also suffered as betting company Flutter dropped out of the FTSE 100 in favor of an initial listing in New York.

Two people familiar with the matter said Shein had begun shifting its focus to London, citing Shein founder Sky Xu’s “strong desire” for an IPO “as soon as possible.”

Shein declined to comment.

People familiar with the situation said China’s securities regulator has not yet given approval for an IPO in New York, while the SEC has not communicated with Shein recently, leaving little clarity on the prospects for a U.S. listing. However, it was also unclear whether China’s securities regulator would approve an IPO in the UK.

CSRC and the SEC did not respond to requests for comment.

But Shein was “encouraged” by the company’s acceptance by London, which has held high-level meetings with the LSE and British officials, including Chancellor Jeremy Hunt, a person close to the company said.

Another person added that Shein would later seek a secondary listing in New York if it had chosen the UK initially.

The company was founded in China and the vast majority of its suppliers are located in the country. However, the company is now headquartered in Singapore and does not sell its products in China.

Tang said he feels “no time pressure” but Shein’s goal remains to pursue a listing that can attract global investors. The primary goal is not to raise cash, allow early investors to exit or create a currency for acquisitions, he said. Instead, her priority was to prove to skeptics that she was acting transparently.

“What could be better than a public company to increase transparency? Right? “The whole world will be looking at you in the public aquarium,” Tang said. “We want to have control.”

Chinese regulators are approaching the case with caution as Shein is the first major litmus test for the government’s new regime that governs the listing of local companies abroad in March last year.

Two investors said Shein had expected the CSRC approval to come soon, but it was unclear why it took so long.

Additional reporting by Ryan McMorrow in Beijing

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