The approval of Shein’s IPO in London is currently under review due to concerns about its supply chain practices.
- The Financial Conduct Authority (FCA) is evaluating potential legal risks associated with Shein’s supply chain.
- Opposition from advocacy groups like Stop Uyghur Genocide has highlighted the use of Xinjiang cotton linked to forced labour.
- The UK’s Independent Anti-Slavery Commissioner has raised labour practice issues that might impact the IPO process.
- Approval from China’s regulators is pending and is expected only after the FCA’s decision.
Shein’s plans to launch an Initial Public Offering (IPO) in London have encountered obstacles as the UK’s Financial Conduct Authority (FCA) is yet to sanction the move. The primary concern lies within the company’s supply chain practices, which have drawn scrutiny due to allegations from advocacy groups.
The FCA is thoroughly examining potential legal risks linked to the retailer’s oversight of its supply chain. This investigation aligns with a legal challenge initiated by Stop Uyghur Genocide (SUG), an advocacy group focused on China’s Uyghur population. The group alleges that Shein’s supply chain includes cotton sourced from China’s Xinjiang region, notorious for forced labour practices.
Further complicating Shein’s IPO ambitions, the UK’s Independent Anti-Slavery Commissioner has expressed worries regarding labour practices among Shein’s suppliers. These concerns have reached governmental levels, potentially influencing the regulatory approval process.
In addition to these UK-centric issues, Shein also awaits a nod from China’s securities regulator. Sources suggest that this approval is contingent on the FCA’s decision, further stalling the IPO process.
Amid these regulatory hurdles, Shein had projected the IPO would value the company at approximately £50 billion. However, this ambition remains in limbo, hinging on the resolution of the highlighted supply chain issues.
As Shein navigates these challenges, it faces stiff competition. The company recently surpassed Boohoo as it reported significant gains in UK pre-tax profits, contrasting sharply with Boohoo’s financial losses over the same period.
The outcome of Shein’s London IPO bid hinges on resolving significant supply chain concerns and securing regulatory approvals.
