Shein says: when in doubt, try the UK out

Shein is saying goodbye to the Big Apple, and hello to Big Ben. After receiving significant pushback to a New York IPO, which it attempted to file for in November 2023, the fast-fashion giant has filed to go public in London.

The two biggest reasons Shein received pushback from US officials:

1. Its alleged use of forced labor in its supply chain. Shein denies using forced labor and says it’s compliant with US law – but also uses many China-based micro-manufacturers, whose supply chains are difficult to track, to make its products.
2. Its use of the de minimis exception, a Department of Homeland Security trade rule designed to facilitate the flow of small packages that allows parcels valued under $800 to enter the US duty-free per person per day. Shein’s approach of shipping products on an order-by-order basis vs. importing its products in bulk to sell from a US warehouse allows it to bypass the heaviest American import taxes.

The UK appears more receptive to Shein. And its IPO market could stand to eat a red-and-white-dotted mushroom or two🍄🚀. ~$1 billion was raised in the UK via IPOs last year, the lowest level in decades, according to data compiled by Bloomberg.

👀 Looking ahead… Shein, which could fetch a valuation of ~$63 billion at IPO, still needs approval from both UK and Chinese regulators before it can go public in London. The company is also weighing other options, including a listing in Hong Kong.