The Chinese fast fashion giant continues to face intense scrutiny in the United States as it is expected to soon attempt an initial public offering on the other side of the Atlantic.
It’s been a while since we last checked in on retail giant SHEIN. Super cheap, Allegedly forced labor and Potentially toxic clothingDelivered directly to consumers Taking advantage of US trade loopholes.
As it turns out, things are pretty busy for SHEIN! In Congress, Senator Marco Rubio (R-FL) Leading to a new call to research brands Joining bipartisan lawmakers on the use of forced labor Previously, we have called for an investigation This is pervasive in the company’s practices. It got the Saturday Night Live treatment.which was parodied in a skit featuring guest host Jake Gyllenhaal.
The criticism doesn’t seem to have had any impact on SHEIN’s sales, which continue to be profitable. More than $2 billion in profits by 2023But all this scrutiny is making it more difficult for Shein to achieve its ultimate goal of going public.
Last week, the Wall Street Journal reported on SHEIN’sHopes for New York IPO are fading“Lawmakers in Washington are suspicious of Shein’s ties to China and are demanding details of its supply chain,” the report said. At the same time, Shein Facing the wrath of the Chinese governmentThis complicates the company’s efforts to show U.S. authorities that it is operating independently, without interference from the Chinese government.
That’s not to say that SHEIN isn’t trying: It filed confidentially with the Securities and Exchange Commission in November for an IPO, according to the WSJ, which would allow SHEIN to keep its business and financial data private but would also create other hurdles.
“The SEC told Shein that its application won’t be accepted unless the company files public documents, people familiar with the matter said. Securities lawyers said it’s an unusual move. Shein has yet to file the documents.”
“While a public filing does not guarantee SEC approval for Shane, it could trigger scrutiny from lawmakers, government officials and the media on a sensitive issue,” securities lawyers say.
“Shain has also filed the same paperwork with China’s securities regulator, a procedure required for any company with significant operations in China seeking to go public.”
The road to an IPO in the U.S. is riddled with landmines, and SHEIN appears set to cross the Atlantic with hopes of going public.
Sky News report On Monday, SHEIN said it was “on the verge of taking a major step towards a London listing that would value it at around £50 billion and mark one of the most significant and controversial transactions in UK capital markets for many years.” Sky reported that the listing application is expected to be filed this month and could happen as early as this week.
Shein is likely to have an easier time negotiating with London Stock Exchange regulators than in the U.S. According to Sky, Shein executive Donald Tan has already met with Chancellor of the Exchequer Jeremy Hunt, stock exchange officials and Labour politicians. CNN noted on Monday.The London Stock Exchange is “hungry for IPOs” after several big names have exited in recent years, which could help Shein.
SHEIN has more public support in London than in the United States, Still facing potential oppositionLeading UK politicians have already called for scrutiny of the deal, with Conservative MP Alicia Kearns saying: “With Shane’s share price so low the London Stock Exchange needs to ask itself at whose expense it is holding it down,” while Labour MP Sarah Champion said: “Transparency in supply chains is vital and something all governments should demand. Serious concerns have been raised about Shane’s use of modern slavery and an investigation is required.”
“It is not ideal that Shane’s London listing would be approved without parliamentary scrutiny,” said Liam Byrne, a Labour member who chairs parliament’s business select committee. “Parliament needs to be satisfied that concerns recently raised by US Congress about forced labour in Shane’s supply chain have been thoroughly addressed.”
So, will SHEIN be able to go ahead with an IPO? We will continue to monitor the possibility of a SHEIN IPO in both the US and the UK. But either way, the US Congress is Pass the Import Security Fairness ActThis closes a “narrow” loophole that has allowed SHEIN and rival Temu to ship goods tariff-free to the US.
