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Shein has secured preliminary approval from the UK’s financial watchdog to float in London, taking the ecommerce company a step closer to a stock market listing.
The Financial Conduct Authority approved Shein’s initial public offering prospectus in recent weeks, according to two people familiar with the process. Its consent came well before US President Donald Trump unleashed chaos in global markets by singling out China after pausing some tariffs on other trading partners.
The nod by the FCA is only a precursor to final approval by the watchdog if the fast-fashion group were to go ahead with the float, the people added. The FCA’s preliminary approval was first reported by Reuters.
Shein appears to be a major victim of the US’s punitive tariffs on China, where the majority of its manufacturers are based, casting doubt over the company’s valuation and future prospects.
Trump has scrapped the so-called de minimis rule, which allowed parcels worth less than $800 to enter the US duty free, and replaced it with a 90 per cent tariff.
The move means that Shein will need to update its prospectus for its mooted London IPO with any material changes, according to one person familiar with the process. While the FCA’s preliminary approval does not have a time limit, a resubmitted prospectus would need a fresh sign-off from the regulator.
Experts have questioned whether Shein’s business model was sustainable in the US — its largest market — with these additional costs.
“It probably does render it very difficult to run these businesses through the US from a practical and financial perspective,” said Simon Irwin, a director at Tanyard Advisory, referring also to Temu, Shein’s rival.
Any Shein IPO was now complicated by the reality that Trump’s trade war meant “there are enormous guesses about the future trajectory of these companies”, he added.
Russ Mould, investment director at AJ Bell, said getting a Shein IPO away at all could prove “tricky” amid a US-China trade war.
“Not only will this make it more difficult to convince investors to back its listing but Shein does business in the US and could well see a significant impact from tariffs beyond just a hit to sentiment,” Mould said.
“It suggests Shein will have to stress to prospective investors that its growth is not reliant on the US and that expansion across a wide range of countries is key to its future.”
Shein was valued at $66bn during its most recent funding round in 2023. But some investors and other stakeholders have been agitating for the valuation to be cut to about $30bn, the Financial Times previously reported. The group was already considering a delay to its listing plans, which had initially targeted the first half of 2025.
The group, founded in China and with headquarters in Singapore, first launched plans to go public in New York in late 2023 but pivoted to the UK after being spurned by the US Securities and Exchange Commission.
The FCA’s preliminary approval indicates that it is satisfied Shein’s prospectus sufficiently discloses the risks around allegations it uses forced labour in China’s Xinjiang region — an issue that has triggered calls by British politicians for the company’s listing to be blocked by the regulator. Shein has previously said that it has a “zero-tolerance policy” regarding forced labour.
However, the FCA is not responsible for verifying the accuracy of information in a prospectus. Any inaccuracies or omissions subsequently discovered can lead to investor lawsuits and FCA enforcement action.
Shein would still need the approval of Chinese regulators to go ahead with an IPO in London.
China’s securities regulator previously gave implicit approval for Shein to shift its planned IPO venue from New York to the UK capital, according to two people familiar with the matter.
The China Securities Regulatory Commission, which oversees offshore
listings of Chinese companies, could issue a formal regulatory response
once Shein obtains official clearance from UK authorities. Final
approval, however, typically rests with higher-level bodies such as
the State Council.
Shein and the FCA declined to comment.
Additional reporting by Ellie Olcott in Beijing and Cheng Leng and Zijing Wu in Hong Kong
