With intentions to sell shares in the company on the London Stock Exchange, notorious fast fashion behemoth Shein—whose popularity skyrocketed during Covid—may soon deepen its links with the UK.
The Chinese corporation may value the company at $66 billion (£51.7 billion) and may submit the necessary paperwork this week.
Shein has become one of the world's largest fashion retailers thanks to its strategy of providing a wide selection of affordable items, supported by promotions involving social media celebrities.
Yet, it has been heavily criticized for its environmental policies and has been accused of utilizing forced labor in its supply chain.
No remark was offered by a representative of Shein.
Two years after the option initially appeared for US customers, the firm unveiled a resale marketplace for shoppers in France on Monday, aiming to bolster its green credentials.
Eventually, the platform will be available in Germany and the United Kingdom, though no exact date has been announced as yet.
The firm is considering the United Kingdom as a potential venue for the sale of its shares following difficulties and close examination in the United States. Documents were filed in the US by Shein last November.
In the midst of rising tensions between Washington and Beijing, several US politicians voiced their concerns over Shein's ties to China.
The Guangzhou, China-based e-commerce company Shein uses a network of thousands of local suppliers and contract manufacturers.
It has accelerated the "test and repeat" strategy, which was initially employed by companies like Inditex, owner of Zara, to produce new goods in a couple of weeks. In this model, companies place tiny orders of clothing items to evaluate how they do with buyers before purchasing more if they are a hit.
Major development... although it is not free of debate.
The City of London would get a huge boost if Shein decided to set up shop in the United Kingdom instead of the United States.
The financial services sector, which accounts for about 10% of the UK economy, benefits greatly from a share listing in the country.
The British government has been rushing to get businesses to set up shop in the nation after a number of them chose the United States.
According to insiders, Shein has the option to file the initial documentation, which is called a prospectus, with the Financial Conduct Authority either this week or later in June.
Any company looking to sell shares on the London Stock Exchange must first file a prospectus with the FCA.
The chief investment officer of the investing business Wealthify, Colleen McHugh, told the BBC's Today programme that this might be significant news for the London stock market.
Still, she did concede that allegations regarding the company's business practices could cause some trouble.
Although registering with the financial watchdog is an important initial step, it does not ensure that a float will proceed.
Claims that some of Shein's garments are made using Uyghur forced labor prompted a group of US congressmen to demand for an investigation into the company last year.
"We have zero tolerance for forced labour," Shein told the BBC at that time.
Despite Shein's assurances that working conditions would improve, a May study indicated that some of its suppliers were still requiring employees to put in 75 hours per week.
According to the Swiss advocacy group Public Eye's inquiry, some employees at six locations in Guangzhou, a major manufacturing hub, were putting in too many hours of overtime.
Many workers frequently put in excessive overtime, according to the group's interviews with thirteen workers from six Chinese factories that supplied Shein.
With "significant progress on enhancing conditions" in hand, Shein assured the BBC that it was "working hard" to resolve the issues highlighted in the Public Eye report.
"It will be up to the regulator to decide whether the listing can proceed here [in the UK] - but it won't be without controversy," Ms. McHugh said of a London listing.
Donald Tang, an American citizen and former Asian banker for Bear Stearns, is now Shein's executive chairman.
When he ran into opposition from US lawmakers and regulators, he met with shadow business minister Jonathan Reynolds and chancellor Jeremy Hunt to propose floating in London.
To quote an official from the Labour Party, "that are looking to invest or list in Britain" included Shein among the many companies that the party has met with.
If a corporation wants to do business in the UK, they need to adhere to our strict regulations. The only way to guarantee this, according to our representative, is for more corporations to operate out of the UK and be subject to UK law.
No remark was given by HM Treasury.
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