Shein Mulls London IPO As US Listing Faces Hurdles: Report

Shein, the Chinese fast-fashion giant, is reportedly contemplating a shift of its initial public offering (IPO) from the U.S. to London due to regulatory obstacles. The company is also considering other potential venues, including Hong Kong and Singapore.

What Happened: Shein, which was initially established in China but is now headquartered in Singapore, is exploring the possibility of a London listing, Bloomberg reported on Monday citing people with knowledge of the matter. This move comes as the company faces challenges with its U.S. IPO application, with the U.S. Securities and Exchange Commission (SEC) showing little inclination to approve it.

The company is still working on its U.S. listing application, but it would need to submit a new overseas listing application with Chinese regulators if it decides to switch to London or elsewhere.

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A potential London listing could revitalize the market, which experienced a dismal year for IPOs. The UK is also grappling with a corporate exodus to the U.S. and other countries.

"Listing on the LSE is a short-term compromise taken by Shein to prioritize certainty over valuation and liquidity," said Ke Yan, head of research at DZT Research in Singapore.

Shein did not immediately respond to Benzinga's request for comment.

Why It Matters: The news of Shein considering a London IPO comes after its backers offered to sell shares at a 30% discount amid fading hopes for an IPO. This development raises questions about the company’s valuation and the challenges it faces in the U.S. market.

Shein’s potential shift to London also coincides with Zara‘s parent company, Industria De Diseno IDEXY, launching a strategic expansion of its budget brand, Lefties, to counter the growing influence of Shein. This indicates the increasing competition Shein is facing in the global fashion market.

Moreover, the company’s IPO plans are unfolding against the backdrop of its rivalry with PDD Holdings Inc‘s PDD Chinese online marketplace, Temu, which is attracting manufacturers previously affiliated with Shein. This intensifying competition could be a factor in Shein’s considerations for its IPO venue.

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