Jeremy Hunt has held talks with the boss of Shein, the Chinese-founded fast fashion giant, in a bid to persuade the company to commit to what would be one of London’s biggest-ever corporate flotations.
Sky News can exclusively reveal the chancellor met Donald Tang, Shein’s executive chairman, this month as part of British regulators’ and government officials’ efforts to convince it to list in the UK.
Insiders confirmed the two men had held “productive” discussions about a London initial public offering amid signs its initial target of a New York flotation is faltering.
The meeting between Mr Hunt and Mr Tang underlines the importance British officials are attaching to the idea of trumping the US in an effort to land the Shein IPO.
One capital markets banker said if it proceeded, Shein could become the London Stock Exchange’s second-largest IPO in history, behind the 2011 stock market debut of Glencore International, the commodities trading and mining group.
Mr Tang has already met executives from the LSE as well as more junior ministers as part of its IPO preparations.
Shein filed documents for a New York listing last year, but has reportedly grown concerned its application may be rejected by the US Securities and Exchange Commission.
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Goldman Sachs, JP Morgan and Morgan Stanley have been appointed to work on the deal.
Image: Shein operates in more than 150 countries. Pic: Reuters
Based in Singapore, Shein has become one of the world’s largest online fashion retailers, although its growth has not been untroubled amid mounting concerns about labour standards.
Last year, Sky News revealed Shein was in talks to buy the British fashion brand Missguided from Mike Ashley’s Frasers Group.
While the transaction itself was worth only a modest sum, retail analysts said it could pave the way for Shein to build a more meaningful profile in the UK, potentially through a broader collaboration with Frasers.
Founded in China in 2012, Shein was valued at over $100bn last year, at which point it was worth more than H&M and Zara’s parent company, Inditex, combined.
The company’s valuation was slashed to $66bn as part of a share sale last year.
Shein now operates in more than 150 countries.
It has also struck an agreement with SPARC Group, a joint venture between the Ted Baker-owner ABG and Simon Property Group, a US shopping mall operator.
Under that deal, SPARC’s Forever 21 fashion brand gained distribution on the Shein platform, which boasts 150m users globally.
Shein acquired a one-third stake in SPARC Group, while SPARC Group also took an undisclosed minority interest in Shein.
The LSE’s efforts to court Shein come during a period of crisis for the City as a listing venue for large multinationals, with ARM Holdings, the UK-based chip designer, opting to float in New York rather than London.
Other companies, such as the gambling operator Flutter Entertainment and drug company Indivior, are planning to shift their primary listings to the US, citing higher valuations and more liquid markets.
Shein declined to comment, while the Treasury could not be reached for comment.
Marks & Spencer (M&S) has ordered hundreds of agency workers at its main distribution centre to stay at home as it grapples with the unfolding impact of a cyberattack on Britain’s best-known retailer.
Sky News has learnt that roughly 200 people who had been due to undertake shift work at M&S’s vast Castle Donington clothing and homewares logistics centre in the East Midlands have been told not to come in amid the escalating crisis.
Agency staff make up about 20% of Castle Donington’s workforce, according to a source close to M&S.
The retailer’s own employees who work at the site have been told to come in as usual, the source added.
“There is work for them to do,” they said.
M&S disclosed last week that it was suspending online orders as a result of the cyberattack, but has provided few other details about the nature and extent of the incident.
In its latest update to investors, the company said on Friday that its product range was “available to browse online, and our stores remain open and ready to welcome and serve customers”.
“We continue to manage the incident proactively and the M&S team – supported by leading experts – is working extremely hard to restore online operations and continue to serve customers well,” it added.
It was unclear on Monday how long the disruption to M&S’s e-commerce operations would last, although retail executives said the cyberattack was “extensive” and that it could take the company some time to fully resolve its impact.
Shares in M&S slid a further 2.4% on Monday morning, following a sharp fall last week, as investors reacted to the absence of positive news about the incident.
At that price, the company’s founder and chief executive, Will Shu, would be in line for a windfall of more than £170m.
Deliveroo further announced, before trading on Monday, that it had suspended its £100m share buyback programme.
The opening share price reaction took the value to 171p per share – still shy of the 180p on the table – and well under the 390p per share flotation price seen in 2021.
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Deliveroo’s shares have weakened nearly 50% since their market debut.
The deal is not expected to face regulatory hurdles as it provides DoorDash access to 10 new markets where it currently has no presence.
But a takeover would likely represent a blow to the City of London given the anticipated loss of a tech-focused player.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “If the deal is done at that price, the company will fail to shake off the ‘Floperoo’ tag it was saddled with after its disastrous IPO debut in 2021.
“Even though Deliveroo has finally broken through into profitable territory, the prolonged bout of indigestion around its share price has continued.
“The surge in demand for home deliveries during the pandemic waned just as competition heated up. Deliveroo’s foray into grocery deliveries has helped it turn a profit but it’s still facing fierce rivals.”
She added: “The DoorDash Deliveroo deal will be unappetising for the government which has been trying to boost the number of tech companies listed in London.
“If Deliveroo is purchased it would join a stream of companies leaving the London Stock Exchange, with too few IPOs [initial public offerings] in the pipeline to make up the numbers.”
A trade deal with the US is “possible” but not “certain”, a senior minister has said as he struck a cautious tone about negotiations with the White House.
Pat McFadden, the Chancellor of the Duchy of Lancaster, told Sunday Morning with Trevor Phillips there was “a serious level of engagement going on at high levels” to secure a UK-US trade deal.
However, Mr McFadden, a key ally of Sir Keir Starmer, struck a more cautious tone than Chancellor Rachel Reeves on the prospect of a US trade deal, saying: “I think an agreement is possible – I don’t think it’s certain, and I don’t want to say it’s certain, but I think it’s possible.”
He went on to say the government wanted an “agreement in the UK’s interests” and not a “hasty deal”, amid fears from critics that Number 10 could acquiesce a deal that lowers food standards, for example, or changes certain taxes in a bid to persuade Donald Trump to lower some of the tariffs that have been placed on British goods.
And asked about the timing of the deal – following recent reports an agreement was imminent – Mr McFadden said: “We’ll keep working with the United States and keep trying to get to an agreement in the coming weeks.”
As well as talks with the US, the UK has also ramped up its efforts with the EU, with suggestions it could include a new EU youth mobility scheme that would allow under-30s from the bloc to live, work and study in the UK and vice versa.
Mr McFadden said he believed the government could “improve upon” the Brexit deal struck by Boris Johnson, saying it had caused “an awful lot of bureaucracy and costs here in the UK”.
He said “first and foremost” on the government’s agenda was securing a food and agriculture and a veterinary agreement, saying it was “such an important area for the UK and an area where we’ve had so much extra cost and bureaucracy because of Brexit”.
He added: “But again, as with the United States, there’s no point in calling the game before it’s done. We’ve still got work to do, and we’re doing that work with our partners in the EU.”
The Cabinet Office minister also rejected suggestions the UK would have to choose between pursuing a trade deal with the US and one with the EU – the latter of which has banned chlorinated chicken in its markets – as has the UK – but which the US has historically wanted.
On the issue of chlorinated chicken, Mr McFadden said the government had “made clear we will not water down animal welfare standards with either party”.
“But I don’t agree that it’s some fundamental choice beyond where we have to pick one trading partner rather than another. I think that’s to misunderstand the nature of the UK economy, and I don’t think would be in our interests to put all our eggs in one basket.”
Also speaking to Trevor Phillips was Tory leader Kemi Badenoch, who said the government should be close to closing the deal with the US “because we got very close last time President Trump was in office”.
She also insisted food standards should not be watered down in order to get a deal, saying she did not reach an agreement with Canada when she was in government for that reason.
“What Labour needs to do now is show that they can get a deal that isn’t making concessions, so we can have what we had last month before the trade tariffs, and we need serious people doing this,” she said.