Online fashion giant Shein to file prospectus for £50bn London float
Shein, the online fashion behemoth, is on the verge of taking a huge stride towards a London flotation that would value it at about £50bn and rank among the most significant – and contentious – deals in the UK’s capital markets for years.
Sky News can exclusively reveal that Shein, which was founded in China but is headquartered in Singapore, is preparing to file a prospectus with the Financial Conduct Authority for approval ahead of its potential float.
City sources said on Sunday evening that the confidential filing could take place as soon as the coming week, although it could yet take place later this month.
The milestone in the listing process would be the clearest sign so far that Shein, which owns the British fashion brand Missguided, is to become London’s most high-profile public float for more than a decade.
The timing of the filing does not necessarily indicate when an initial public offering would take place, although some observers believe a summer or early autumn stock market debut in London remains on the cards.
Shein had initially targeted a New York listing but has been beset by political opposition which has resulted in a lukewarm reception from regulators.
By contrast, Sky News revealed earlier this year that Donald Tang, Shein’s executive chairman, had met Jeremy Hunt, the chancellor, earlier this year, alongside other ministers and executives from the London Stock Exchange.
The meeting between Mr Hunt and Mr Tang underlined the importance that British officials are attaching to the idea of trumping the US in an effort to land the Shein IPO.
Mr Tang is also understood to have spoken to a number of frontbench Labour politicians, including Jonathan Reynolds, the shadow business secretary in recent months.
The filing of a prospectus with the FCA does not guarantee that the company will list in London, with a final decision subject to meetings with fund managers and the approval of listing authorities in the UK.
However, people close to the process said it represented a significant moment that meant a City float for Shein was now highly likely.
A Shein advert on the London Underground. Pic: Reuters
Shein has been at the centre of controversy over its use of cotton from the Xinjiang region of China and other issues related to workers’ rights and its vast supply chain.
If it does proceed with a London listing, Shein is expected to seek to raise over £1bn from the sale of new shares to investors.
This would, however, be relatively modest in the context of an anticipated valuation of £50bn or more.
The company was valued at $66bn in its last funding round early last year.
Last month, Sky News revealed that Sajid Javid, the former chancellor of the exchequer, has been approached about taking a role at Shein.
If the discussions proceed, they could see him either join Shein’s board or become an adviser to the Chinese-founded company.
Shein could be responsible for staging 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.
Goldman Sachs, JP Morgan and Morgan Stanley are advising on the deal.
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Founded in China in 2012, Shein was valued at over $100bn in 2022, at which point it was worth more than H&M and Zara’s parent company, Inditex, combined.
It operates in more than 150 countries and boasts 150m users globally.
The LSE’s efforts to court Shein come during a challenging period 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 tour operator TUI, have shifted their listings away from London, citing higher valuations and more liquid markets.
In recent weeks, however, London has landed the prospective IPOs of Raspberry Pi, the personal computer maker, delivering a boost to the City.
Last month, Mr Hunt hosted a summit at Dorneywood attended by technology companies such as Raspberry Pi and Monzo, the digital bank valued at over £4bn, as part of efforts to encourage them to list in the UK.
Shein declined to comment on Sunday night.
A trio of property giants has lodged a protest against a radical financial restructuring that will see Cineworld imposing steep rent cuts on its landlords.
Sky News has learnt that British Land, Landsec and Legal & General Investment Management all voted against the cinema operator’s restructuring plan this week.
Cineworld has confirmed plans to close six of its UK multiplexes, but documents circulated to creditors show almost 50 others are in categories requiring landlords to agree to revised rent deals in order to ensure their long-term viability.
Although they carry significant influence in the commercial property sector, the trio’s protest will have no impact on the outcome of the company’s proposals, since its owners are now also among its largest creditors, meaning they can effectively force the deal through.
According to documents sent to creditors during the summer, 33 sites – categorised as Class B – “require a reduction of rent to ERV [Estimated Rental Value] Rent in order to place the sites on a viable long-term footing”.
A further 38 of Cineworld’s cinemas would be unaffected, while another 16 Class C1 and C2 leases require reductions to either turnover rent or zero rent in order to render them financially viable.
The documents added that the company did not have sufficient funding to meet a quarterly rent bill on June 24 of £15.9m.
“The UK group did not have sufficient liquidity to make the June 2024 Rent Payment and required further funding from the US Group to meet this liquidity need.
“Absent this funding, the UK Group would have been insolvent on a cashflow basis.”
Cineworld is being advised by AlixPartners.
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Other cinema operators are now poised to step in to take over some of Cineworld’s sites.
The company trades from more than 100 locations in Britain, including at the Picturehouse chain, and employs thousands of people.
Cineworld grew under the leadership of the Greidinger family into a global giant of the industry, acquiring chains including Regal in the US in 2018 and the British company of the same name four years earlier.
Its multibillion-dollar debt mountain led it into crisis, though, and forced the company into Chapter 11 bankruptcy protection in 2022.
It delisted from the London Stock Exchange last August, having seen its share price collapse amid fears for its survival.
Cineworld also operates in central and Eastern Europe, Israel and the US.
A long-running measure of consumer confidence has slumped to levels last seen at the start of the year following warnings of “tough choices” ahead in the looming budget.
GfK’s Consumer Confidence Index fell seven points in September to minus 20, with significant drops in predictions for personal finances and the general economy over the coming year.
The report’s authors suggested it was “not encouraging news” for the new government, which has made growing the economy its top priority.
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But within weeks of taking the post of chancellor, Rachel Reeves – followed by prime minister Sir Keir Starmer – moved to warn of a legacy £22bn “black hole” in the public finances and said it would result in a painful budget on 30 October.
Among measures already taken include cuts to winter fuel payments, leaving up to 10 million pensioners up to £300 worse off, and inflation-busting public sector pay settlements.
Tax rises and spending cuts are widely expected in next month’s statement to MPs though The Times reported on Friday that a decision by the Bank of England to slow a programme of loss-making bond sales would leave Ms Reeves £10bn better off than she had anticipated.
It added that she was still expected to push forward with her budget plans anyway as a signal of her commitment to fiscal discipline.
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The latest snapshot on the public finances, released by the Office for National Statistics (ONS) on Friday showed net borrowing of £13.7bn during August.
Its chief economist, Grant Fitzner, said: “Borrowing was up by over £3bn last month on 2023’s figure, and was the third highest August borrowing on record.
“Central government tax receipts grew strongly, but this was outweighed by higher expenditure, largely driven by benefits uprating and higher spending on public services due to increased running costs and pay.”
Consumer spending accounts for around 60% of the UK economy.
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Data released separately on Friday showed a 1% rise in retail sales volumes during August in the wake of weakness, mostly blamed on poor weather, over the previous couple of months.
The ONS said that the increase was driven by supermarket sales, as demand for BBQ food and drinks rose due to the arrival of some sunshine over the key holiday month.
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It also credited discounting by clothing retailers.
The data chimes with the latest updates from big retailers, including Next and B&Q’s owner, which have spoken of weak demand for so-called big ticket items such as home furnishings and kitchens respectively.
GfK’s closely-watched survey showed expectations for the general economy over the next 12 months fell by 12 points to -27, while the forecast for personal finances was down nine points to -3.
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Commenting on its key measures, including the headline figure, consumer insights director at GfK Neil Bellamy said: “These three measures are key forward-looking indicators so despite stable inflation and the prospect of further cuts in the base interest rate, this is not encouraging news for the UK’s new government.”
He added: “Strong consumer confidence matters because it underpins economic growth and is a significant driver of shoppers’ willingness to spend.
“Following the withdrawal of the winter fuel payments, and clear warnings of further difficult decisions to come on tax, spending and welfare, consumers are nervously awaiting the budget decisions on October 30.”
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