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Shein's big choice: Fast fashion giant weighs going public in U.S. or U.K.

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May 17, 2024
A Shein sign in pink hovers over its opening party at O Beach Ibiza in Spain on May 3.

The Shein opening party at O Beach Ibiza in Spain on May 3. Photo: Xavi Torrent/Getty Images for Shein

Shein's decision on where to list isn't final yet, as the company weighs the benefits of a U.S. or U.K. listing, sources familiar with the situation say.

Why it matters: All eyes are on the giant retailer's IPO.

State of play: Reuters reported the company could list on the London Stock Exchange (LSE) as soon as this month, and Axios confirmed Shein is weighing a London IPO.

Reality check: The U.S. makes the most sense for Shein's listing.

What they're saying: Shein's executive chair, Donald Tang, told the Financial Times that it has made "progress" on changing U.S. lawmaker's negative perception of it, "but not enough."

Zoom out: Shein's choice of exchange could influence other Chinese companies also weighing IPOs, says Drew Bernstein, co-chairman of Marcum Asia CPAs.

  • "Most, if not all, exchanges would want to list potentially the largest IPO of the year," he says.

Between the lines: Sources say no one in the U.S. is blocking a Shein IPO and it is not the role of the SEC to do so.

  • Only Chinese regulators have prevented Chinese companies from going public in the U.S. or pushed them to delist, as in the case of ride-sharing company DiDi.
  • And whether the China Securities Regulatory Commission (CSRC) gives a thumbs up or down, it applies equally to all exchanges outside the country, including the London Stock Exchange, the New York Stock Exchange, and the Nasdaq.

The intrigue: Shein faces business risks regardless of where it lists.

Threat level: Shein also relies heavily on third parties to ensure its vast supply chain remains free of forced labor.

  • In an internal April memo viewed by Axios, Shein called on employees to voice concerns they have about compliance practices.
  • The memo cites the Department of Homeland Security's enforcement efforts tied to textile de minimis importation.

Friction point: Shein's impetus to IPO is to be more transparent, a source close to the company's thinking says — but Shein's founder and CEO, Sky Xu, is intensely private.

  • That poses yet another risk, as a spokesperson is one of the main jobs of the head of a publicly traded company.

Shein and the SEC declined to comment. The LSE did not respond to Axios' request for comment.

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