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Shein bosses will face grilling from investors over the coming weeks as they look to drum up support for a controversial £50bn IPO.
The Chinese fashion giant will go on a roadshow to convince shareholders to back its initial public offering (IPO) in London, scheduled for early next year.
But growing questions about its business practices mean Chairman Donald Tang and billionaire founder Chris Xu are likely to face a grueling round of questioning from institutional investors.
Influence: Georgia Toffolo on Shein. Chinese fashion giant Shein will hold a roadshow to convince its shareholders to support its London IPO, scheduled for early next year
Regulators still need to give the green light to the listing after opposition arose from both human rights groups and corporate organizations.
Russ Mould, chief investment officer at brokerage AJ Bell, said: “One can only imagine the number of questions from potential investors, given the uncertainties around business practices, supply chains, corporate governance, alleged breaches intellectual property, costs, margins and tariffs.
‘All of these questions need to be answered before Shein has the opportunity to move forward with its IPO.
‘Under normal circumstances, Shein’s position as a fast-growing retailer expanding across multiple geographies and taking market share from established players would have made it a no-brainer for investors.
“However, there is an element of ‘it’s too good to be true’ with Shein that makes it a more difficult investment decision.”
Shein is believed to have first filed documents to launch an IPO a year ago, meaning the process is taking longer than usual, Mold added. MPs on the enterprise select committee will also scrutinize employers for concerns about forced labor in January.
Shein has insisted it has a “zero tolerance” approach to forced labor and has increased checks on suppliers.
Although a listing would be a boon for London, top money managers have been cautious about getting caught up in the company’s controversies.
The UK Sustainable Finance and Investment Association, whose members include Aviva Investors, Schroders and M&G, has said London should not “become a place of last resort for companies with poor human rights records”.
The British Fashion Council also warned that the planned IPO is a “major concern” for the industry.
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