The FTSE 100 is expected to get a boost next month when Chinese online giant Shein announces it has decided to float its shares in London.
Support for a blockbuster share offering came from chancellor Jeremy Hunt and Labour’s shadow business secretary Johnny Reynolds following last month’s visit to the UK by fashion groups chairman Donald Tang .
Shein had originally indicated a preference for an initial public offering in New York, where stock market valuations for online companies tend to be much higher.
But the deteriorating political environment for Chinese companies in the United States led them to look to London.
With a potential valuation of £60 billion or more, Shein would immediately join the top spot among London-listed companies if the public offering goes ahead.
Change of mind: Shein had originally indicated a preference for an initial public offering in New York, where stock valuations of online companies tend to be much higher.
The hostile climate toward China in the United States was underscored last week when the U.S. Congress gave its approval to a bill forcing ByteDance, the Beijing-based owner of Tik Tok, to divest its U.S. operations. for national security reasons. President Biden has signaled that he will sign the bill.
The United States fears that the social media platform could provide its parent company with access to confidential data it holds on 170 million users.
Headquartered in Singapore, Shein manufactures most of its production in China and uses advanced technology to translate the latest fashion designs into new products. Little is known about the group’s financial fundamentals, which will be revealed in a prospectus at the time of the listing.
Founded in Nanking in 2008 by Chris Xu, an American-born entrepreneur and search engine expert, it earned its reputation as a low-cost clothing brand. Its products are shipped to more than 150 countries worldwide, including Great Britain, one of its largest markets.
It sources products from about 6,000 factories across China under the Shein brand and has been described by Time magazine as the Amazon of fashion.
However, its presentation in London is sure to be controversial. The company has been dogged by accusations of long working hours at some of its factories and operations in parts of China where human rights abuses occur.
But Tang is said to have been reassured by his conversations with UK politicians and took special care to engage with Labor when he was visiting Britain.
